Belt and braces

On 20 December 2009, the Public Contracts and Utilities Contracts (Scotland) Amendment Regulations 2009 came into force. These snappily named rules apply to Scottish contract award procedures started on, or after that date. European rules mean the same principles apply equally to landlords in England and Wales.

As contracting authorities under the regulations, social landlords must take account of the changes they effect. Social landlords now operate in a procurement environment in which it will be much simpler for aggrieved candidates and tenderers to raise proceedings to challenge procurement processes and contract award decisions.

Before last December’s change, the remedies available to unsuccessful bidders or bidders not invited to tender after contract award were limited to a damages claim. These were often hard to prove and expensive to run.

Now, bidders can challenge the contract award and the courts must declare the contract ‘ineffective’ in circumstances in which it has not been properly tendered and no opportunity for challenge before contract award was given. If a contract is declared ineffective then it will be prospectively cancelled and set aside. It is imperative that landlords’ procurement policies are robust, transparent and comprehensive. They must protect them from the risk of challenge to the greatest extent possible.

The regulations represent a fundamental change in the public procurement regime, and landlords should take early action to protect themselves from the financial and reputational risks associated with a breach of the new regulations.

James McMorrow is a partner at Harper Macleod - james.mcmorrow@harpermacleod.co.uk

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