Public Procurement - Implementation Of The New Remedies Directive

Author:Ms Farah Al-Hassani
Profession:Biggart Baillie
 
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On 20 December 2009, new regulations implementing the Remedies Directive entered into force in Scotland. The Remedies Directive aim to provide more effective remedies for firms which suffer as a result of breaches of the public procurement rules by contracting authorities.

The Public Contracts and Utilities Contracts (Scotland) Amendment Regulations 2009 mark a significant departure from the previous position under which aggrieved bidders were restricted to damages once a contract was awarded in breach of the rules.

Key changes

Ineffectiveness

The most significant change in the rules is the introduction of the new remedy of ineffectiveness, which may be sought after a contract has been entered into. The courts are now empowered to make a declaration of ineffectiveness and set aside contracts awarded in breach of certain procurement rules, in addition to imposing a financial penalty on the contracting authority. The grounds on which a declaration of ineffectiveness may be made are as follows:

a direct award of contract without prior publication of an OJEU contract notice where required; a contract is entered into in breach of the mandatory standstill period or following the start of proceedings in respect of a contracting authority's decision and, together with a further breach of the procurement rules, the breach has affected the bidder's chances of winning the contract; or a contract is awarded under a framework agreement or dynamic purchasing system in breach of the procurement rules. Legal proceedings for a declaration of ineffectiveness must be brought within 6 months of the day on which the contract was entered into, but in cases where a contract award notice has been published in OJEU or the contracting authority has notified the claimant of the decision, the time period is reduced to 30 days.

Where legal proceedings are commenced alleging a breach of the procurement rules in relation to a contract award...

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