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Home / Public Regulations / Quick guide to Remedies Directive EU Regs

Quick guide to Remedies Directive EU Regs

Here is a quick guide to remember the key points in the Remedies Directives 

Remedies Directive- Public Contracts Regulations 2009 (amended)

  • Right to sue if a contract is entered into before the standstill period has ended.
  • Automatic right to cancellation or variation of any contract awarded to another bidder if in breach of the rules.
  • Compulsory to enter into a contract only after the standstill period has ended
  • Once proceedings have started it is automatically unlawful to enter into a contract until the matter has come before the court
  • An unsuccessful bidder can claim damages if they start proceedings within 30 days from the day in which the economic operator ought to have known that grounds for starting the proceedings has arisen. At the discretion of the courts they can extend this time up to 3 months. (only damages apply)
  • Declaration of ineffectiveness- which the court is obliged to make if a contracting authority has committed any breaches of the procurement rules.
  • Declaration of ineffectiveness, three rules- 1) where the contracting authority has awarded a contract without placing an OJEU, 2) breach of rules relating to the standstill period, 3) a call off contract under a framework of goods or services with a value above the OJEU threshold has been entered into without following the relevant call off procedures.
  • The declaration of ineffectiveness can be void on public interest grounds, if the burden of proof is failed to be discharged then the court has to impose financial penalties, which must be effective and dissuasive.
  • Explicit duty to debrief losers at the PQQ stage.

Expanding the required content of Alcatel letters- characteristics and relative advantages of the winner

  • The scores of the successful tender and the relevant unsuccessful bidder
  • The name of the successful tenderer
  • Precise details of the applicable standstill perio
  • 30 day period for claims for a Declaration of Ineffectiveness (where the commissioner has taken the precaution of advertising the final award and/or notified each bidder), extended to six months If the commissioner fails to advertise or give notice
  • If a contract has been awarded and the claimant wishes to obtain an interim injunction for the award of contract until the claim is heard then the claim must be brought to three months, and there is a potential for open-ended risk of damages or claims even beyond the period subject to ordinary limitation rules
  • Damages claims can be bought regardless of the time limit for up to 6 years after the date of the breach or knowledge(deemed or actual)
  • The key difference with the ineffectiveness remedy lies in the almost automatic grant of the remedy to the claimant and the reversal of burden of proof for the authority.
  • Ineffectiveness applies in three main situations: An illegal direct award, a significant breach of standstill obligation or a breach of the framework agreement, dynamic purchasing rules

Disclosure- ITT
State the criteria and weighting in the contract notice
Standstill notice shall include criteria for the award
The criteria and weightings is disclosed
The sub- criteria/ methodology is discretionary ( providing that the it doesn’t alter the main criteria or does not contain anything which, had it been known in preparing tenders, could have affected preparation or is non-discriminatory
Model answers are generally given as this is likely to result in identikit answers or a lack of innovation in the responses
Varney case study
In a very important decision for public sector procurers, the Court of Appeal has confirmed the highly pragmatic position taken by the High Court in relation to the disclosure of evaluation criteria and sub criteria. In J Varney & Sons Waste Management Limited v Hertfordshire County Council, the Court of Appeal have provided a common sense approach to what needs to be disclosed to bidders in the tender documents.
The case
This case concerns a bid submitted by a company, Varney, for a contract to operate up to 18 waste recycling centres in Hertfordshire. It provides us with useful clarification on the law relating to the use and disclosure of sub-criteria for the purpose of bid evaluation.
The procurement, carried out by Hertfordshire County Council, was for a five-year contract and the restricted procedure was used for the exercise. The original advertisement had indicated that the award criteria would be the most economically advantageous tender in terms of price and customer satisfaction, and set out the relative weightings of those two criteria. In response to the ITT itself, bidders were required to submit various ‘return schedules’ containing details of various matters including proposed staffing levels. In each schedule, the council set out the standard of service required in relation to the subject matter of each schedule.
Varney was unsuccessful in winning any of the contracts. It subsequently launched what turned out to be an unsuccessful High Court challenge to the procurement process on the basis of errors in the application of the criteria and sub-criteria used by the council to evaluate the bids.
The detail
The main planks of Varney’s complaint were that:
Each of the return schedules operated as separate sub-criteria when it came to the evaluation. However, the council had failed to disclose all of the criteria, sub-criteria and weightings that would be applied when determining which of the bids was the most economically advantageous. The fact that they were award criteria and the weightings attached to each were not disclosed to Varney.
Varney claimed that it had been led to believe that staffing levels would play a significant part in bid evaluation. This had led Varney to propose high levels of quality staff for the contract. However, the council had ultimately given little credit for staffing and this had led to Varney overpricing its bid.
The council had applied criteria, sub-criteria and weightings which were inconsistent with those disclosed in the ITT.

The High Court had found against Varney, and dismissed the claim. It also found that part of Varney’s claim had been brought too late, and was therefore time-barred. Varney appealed.
The appeal
The appeal was heard on 21 June by the Court of Appeal, which dismissed it. It noted that the requirement of transparency in public procurement procedures is achieved under the 2006 Regulations by requiring:
the criteria for the award of a contract to be identified to tenderers, with the weighting attached to each criterion, so that those matters are known and applied equally to all tenderers (Regulation 30)
certain information to be provided to tenderers as soon as possible after making the award decision.

Varney referred to the Letting International v Newham LBC case in the High Court (a similar case about bid evaluation), where the judge had applied the dictionary definition of the word “criterion” – namely a “principle, standard or test by which a thing is judged assessed or identified”. Interestingly, the Court of Appeal considered that it would be inappropriate to apply that definition to award criteria in procurements; doing so would mean that the procurement rules would have to be interpreted as requiring every single standard by which a bid is to be evaluated – no matter how trivial – to be disclosed, together with a proposed weighting. That would be impracticable and, in any event, is not what is contemplated by EU law.
The court also considered the ruling in ATI EAV v ACTV Venezia, where the European Court of Justice (ECJ) considered the question of whether the procurement directives meant that contracting authorities could not apply undisclosed weightings to sub-criteria in evaluating bids.
The ECJ ruled that if the award criteria and their weightings, along with any sub-criteria, have been established and described in the contract notice or the tender documents, then the fact that they have not been disclosed in advance is irrelevant, as long as:
in all the circumstances, the decision to apply such weightings did not alter the criteria for awarding the contract set out in the contract documents or the contract notice the non-disclosed weightings of sub-criteria would not  have affected bid preparation if they had been disclosed the decision to apply the weighting was not adopted on the basis of matters which were likely to give rise to discrimination against one of the tenderers

Conclusion
The main guidance on the topic of sub-criteria and sub-weightings, and the extent to which it is necessary to disclose them in an ITT, remains the Venezia case, with this case having now been applied by the Court of Appeal in Varney. It is clear that, although a reasonable amount of detail should be provided in order that bidders understand what is expected of them, authorities who adhere to the principles in Venezia need not become paranoid about formulating an intricately detailed methodology for the weighting of sub-criteria and disclosing every last detail of it. To do so would, as the Court of Appeal agrees, be impractical and is not what the European Union rules intend.

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