Regulation 95 – Contract making suspended by challenge to award decision

Commentary

Regulation 95 PCR2015 sets up the conditions under which a challenge to an award decision suspends any contract-making possibilities for the contracting authority–ie triggers a litigation-related stand-still obligation. It is important to stress that Regulation 95(3) PCR2015 clarifies that this litigation-related stand-still obligation does not affect any of the obligations eventually imposed by Regulation 87 PCR2015  (ie the Alcatel or non-litigation related stand-still obligation). Therefore, a stand-still obligation derived from regulation 95 can arise even if the Alcatel stand-still period was not applicable to the specific award decision or, if applicable, has elapsed; provided the conditions set out in Regulation 95(1) PCR2015 are met.

In that regard, under Regulation 95(1) PCR2015, such litigation-related stand-still obligation applies, and the contracting authority is required to refrain from entering into the contract, where a claim form has been issued in respect of a contracting authority’s decision to award the contract, the contracting authority has become aware that the claim form has been issued and that it relates to that decision, and the contract has not been entered into.

Hence, this is an obligation that the contracting authority needs to comply with in good faith and in order to pre-empt the possibility of a successful challenge beyond the minimum Alcatel period (if any), should the contracting authority still not had taken the necessary steps to conclude the contract and get its performance started. It is, in my view, a sort of estoppel that prevents the contracting authority to rush to conclude a contract only after having become aware of a challenge of the previous award decision.

Regulation 95(2) PCR2015 determines that such litigation-related stand-still obligation will remain until either the Court brings the requirement to an end by interim order under Rgulation 96(1)(a) PCR2015; or the proceedings at first instance are determined, discontinued or otherwise disposed of and no order has been made continuing the requirement (for example in connection with an appeal or the possibility of an appeal).

This is an important procedural mechanism and imposes clear incentives on contracting authorities to enter into contracts promptly after the expiry of the Alcatel stand-still obligation, where it applies (see Regulation 86 PCR2015) and, generally, once it is clear that there is no need to wait any further before proceeding to conclusion and performance.

Last modified: December 6, 2016 by Pedro Telles

95.—(1) Where—

(a)a claim form has been issued in respect of a contracting authority’s decision to award the contract,

(b)the contracting authority has become aware that the claim form has been issued and that it relates to that decision, and

(c)the contract has not been entered into,

the contracting authority is required to refrain from entering into the contract.

(2) The requirement continues until any of the following occurs—

(a)the Court brings the requirement to an end by interim order under regulation 96(1)(a);

(b)the proceedings at first instance are determined, discontinued or otherwise disposed of and no order has been made continuing the requirement (for example in connection with an appeal or the possibility of an appeal).

(3) This regulation does not affect the obligations imposed by regulation 87.