Automatic Suspension - plus ça change mais plus c’est la même chose?
The UK procurement rules were amended in 2009 to implement Directive 2007/66 EC, more commonly known as the Remedies Directive. Much was made at the time of the strengthened position of bidders looking to challenge public procurement decisions. One of the key new remedies available to them was automatic suspension. Now, almost two years since the introduction of the new remedies rules, we consider the effect automatic suspension has actually had on procurement challenges.
What is automatic suspension?
Automatic suspension is intended to ensure that contracts are not concluded before an independent review body has had the opportunity to consider any challenge to a contract award decision. It was introduced by the Remedies Directive together with an EU-wide mandatory standstill period between the announcement of the contract award decision and the conclusion of the contract with the successful bidder.
As a result, where proceedings are started in respect of a contracting authority’s decision to award a contract, and the contract has not yet been entered into, the starting of proceedings requires the authority to refrain from entering into the contract. The automatic suspension persists until either the proceedings are determined or the Court grants an interim order lifting the automatic suspension.
Proceedings are "started" when the summons has been served on the authority. The automatic suspension provisions mean a bidder no longer needs to apply to the Court for an interim interdict to prevent a contracting authority from entering into a contract. Instead, if the contracting authority wants to award the contract, the onus is on the authority to apply to the Court to lift the automatic suspension.
The implementing provisions in England, Wales and Northern Ireland (the Public Contracts Regulations 2006, as amended) specify that when deciding whether to make an order to lift the automatic suspension:
(a) the Court must consider whether, if (automatic suspension) was not applicable, it would be appropriate to make an interim order requiring the contracting authority to refrain from entering into the contract; and
(b) only if the Court considers that it would not be appropriate to make such an interim order may it make an order (bringing to an end the automatic suspension).
Provision is also made for the Court to require undertakings in damages or other conditions: “If the Court considers that it would not be appropriate to make an interim order [requiring the authority to refrain from entering into the contract] in the absence of undertakings or conditions, it may require or impose such undertakings or conditions in relation to the requirement (for automatic suspension)”
Comments
On the one hand, the experience to date with automatic suspension suggests very little has changed. The caselaw suggests that the Courts are reluctant to allow suspension to remain in place. Automatic suspension is likely to be lifted unless the claimant is able to show not only a strong prima facie case as to a breach of the rules - but also that delaying contract will not jeopardise the performance of the authority’s functions in a way that might harm the public. However, automatic suspension does present a potent weapon for aggrieved unsuccessful bidders. Issuing proceedings may be enough to have the award decision reversed.
Looking ahead it is arguable the Courts have given too much weight to public interest considerations around the expense, delay and inconvenience of having to re-tender contracts as against the public interest in contracts being properly awarded in a way that is open and transparent. Whether that is the case or not, the case-law on automatic suspension is likely to develop over the next few years in this increasingly litigious market.
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