The EU “Treaty Principles (derived from the TFEU and the fundamental freedoms of the EU) are:
* Proportionality.
* Mutual recognition.
* Transparency.
* Non-discrimination.
* Equal treatment.
The Treaty on the Functioning of the European Union applies to all procurement activity regardless of value, including contracts below the thresholds at which advertising in the Official Journal of the European Union is required and including contracts which are exempt from application of the EU Procurement Directives.
These EU Treaty Principles apply to all procurements with a “cross-border interest”, whether or not the full procurement regime (and, therefore, the Regulations) applies.
Whether if these principles still apply after Brexit remains to be seen. Though it’s possible that we may no longer have cross-border interest the Public Regulation 2015 are part of UK Law and the rules actually act as a sensible framework to conduct procurement in a transparent manner so it’s likely that the principles will remain in some shape or form.
Private sector procurement is not subject to any EU regulations but instead Common Law of the UK applies.
Procurement in the private sector is still subject to the rules on transparency because a contractual relationship may be implied as part of the tendering arrangement. Generally speaking, a contract is not formed through until the tender is accepted by the buying organisation and converted into a contract.
Most tender instructions will be written to show that the Invitation to Tender creates no legal relations and the cost of tendering is borne by the supplier, however if the supplier can prove there was never intended to award a contract fairly there may be a risk of the tender process being a case of fraud which may give rise to action for compensation.
For genuine reasons, a buying organisation is free to cancel a tender at any point during the process. Suppliers can sue for damages on an implied contractual duty if they have submitted a compliant bid.
In law it is implied that the tenderer must open and consider all compliant bids, all non-compliant bids may be rejected. Non-discrimination applies to all tenders because if one bidder was treated more favourably and privy to information not shared with other bidders it could be alleged that the unfair treatment is viewed as some form of corruption, collusion or bribery. This invalidates the tender process. Other bidders may decide to bring an action for deceit or fraud resulting in financial penalty and loss of reputation for the buying organisation.
Though the private sector is not subject to the same remedies of the public sector, it is best practice to follow the EU Treaty Principles to protect the buying organisation and avoid any wrongdoing.
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