There has been a Government consultation on how the new EU
Remedies Directive (2007/66/EC) ("the Directive") is
going to be incorporated into UK law. The Directive has to be
implemented by 20 December 2009, although there are some choices
over how parts of it are brought in by individual EU member
states.
The Directive makes two key changes to the Public Contracts
Regulations 2006 ("the Regulations"):
- to extend the "standstill period" to 15 days where email or fax is not used to notify the contractors of the contract award; and
- to introduce a new "ineffectiveness" remedy, allowing contracts to be set aside for a serious breach of EU procurement rules, such as awarding a contract without prior publication of a contract notice or entering into a contract before the standstill period has ended. The Office of Government Commerce ("OGC") has chosen "prospective" ineffectiveness for the UK. "Prospective" ineffectiveness releases both parties from the contract for the future, but does not "undo" anything already done. This will apply to all contracts, including those made under framework agreements. As currently drafted, an ineffectiveness claim for a contract called off under a framework agreement can only be brought where the contract was called off in breach of the mini-competition procedure between the contractors. The ineffectiveness remedy does not apply where notice of the award has been served and a standstill period has been applied to the call-off from a framework agreement following a mini-competition. As currently drafted, a call-off contract made by way of the application of the "terms laid down in the framework agreement" (ie without a mini-competition) would not be subject to the ineffectiveness procedure.
The OGC has carried out two consultations on implementing the new Directive and we responded to both of them. The first was on general principles and the second included detailed draft regulations for the new standstill provisions and ineffectiveness remedy. Some of the points we made were:
- in some areas the clarity of drafting needs to be improved so they can be understood by those who have to use them;
- the need to give a minimum time for a contractor to start proceedings after a breach of duty by the contracting authority. As presently drafted, proceedings need to be brought "promptly". We have pointed out that this can never be less than 15 days as a minimum;
- the suggestion that the new provisions apply to all contracts concluded after 20 December 2009, so that no confusion arises about whether the new Regulations apply.
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