Regulation 89 – Duty owed to economic operators from EEA states

Commentary

Regulation 89 PCR2015 sets the duty owed to economic operators from EEA states, whereby contracting authorities are required to comply with the provisions of Parts 2 and 3 PCR2015; and any enforceable EU obligation in the field of public procurement in respect of a contract or design contest falling within the scope of Part 2 PCR2015. Regulation 89(2) PCR2015 explicitly states that such obligation is a duty owed to an economic operator from the United Kingdom or from another EEA state.

This is a provision that may gain significant relevance in the context of Brexit, particularly if some proposals to chop off the access to remedies for non-UK economic operators were followed (see suggestion by Arrowsmith in her White Paper on “The implications of Brexit for the law on public and utilities procurement”). We strongly oppose such a development (see here, herehere and here), but recognise that this will be an area of relevant policy debate in the immediate future. That is why a proper understanding of this provision may be particularly relevant.

For continental lawyers, this is a regulation that does not make much sense and that seems superfluous. Under general conceptions of public law (at least in Spain, Portugal and in other countries based on the French system of public law and public administration), public bodies (and other contracting entities governed by public law) must abide by the law and any infringement can result in individual rights to claim for any negative consequences of such a procedural or substantive breach.

On the contrary, as far as we understand it, under English (and Welsh?) public/administrative law, individuals and undertakings only have a claim against the public sector if it breaches a duty owed to them. This has been made quite clear in a recent opinion of Lord Reed, in a recent Supreme Court decision where he stressed that:

A public authority can violate the rule of law without infringing the rights of any individual: if, for example, the duty which it fails to perform is not owed to any specific person, or the powers which it exceeds do not trespass upon property or other private rights. A rights-based approach to standing is therefore incompatible with the performance of the courts’ function [on review] of preserving the rule of law … [AXA General Insurance Ltd. v HMAdvocate [2011] UKSC 46, [2012] 1 A.C. 868 at [169]–[170]; apud JNE Varuhas, “The Reformation of English Administrative Law? “Rights”, Rhetoric and Reality” (2013) 72 Cambridge Law Journal 369-413, 382; emphasis added].

Consequently, Regulation 89 PCR2015 is the cornerstone of the system of remedies envisaged in Chapter 6 PCR2015, as it creates the rights to claim on the basis of a breach of such duty for economic operators from EEA states. The extension of such duty (and ensuing right to claim) to economic operators from certain other states is established in Regulation 90 PCR2015 (CROSSREF).

The existence of broader possibilities to challenge procurement-related decisions without the coverage of a duty owed under regulations 89 and 90 PCR2015 is a contentious issue under English law. For discussion, see SH Bailey, “Reflections on standing for judicial review in procurement cases” (2015) 24(4) Public Procurement Law Review 122-132. See also P Henty, “Can a trade union judicially review a breach of the PCRs?: R. (on the application of Unison) v NHS Wiltshire Primary Care Trust and others” (2012) 21(4) Public Procurement Law Review NA203-207; and SH Bailey, “Contracting and judicial review: R. (on the application of A) v Chief Constable of B Constabulary” (2013) 22(4) Public Procurement Law Review NA106-108.

Last modified: December 6, 2016 by Pedro Telles

89.—(1) This regulation applies to the obligation on a contracting authority to comply with—

(a)the provisions of Parts 2 and 3; and

(b)any enforceable EU obligation in the field of public procurement in respect of a contract or design contest falling within the scope of Part 2.

(2) That obligation is a duty owed to an economic operator from the United Kingdom or from another EEA state.