Regulations 85, 86 and 87

Commentary

Regulations 85 to 87 PCR2015 establish rules for the facilitation of remedies. They create both an obligation to issue notices of decisions to award a contract or conclude a framework agreement (Regulation 86) and to comply with a standstill period prior to entering into the contract or concluding the framework agreement (Regulation 87. As such, we will be commenting on them all together.

These regulations are not a result of the transposition of Directive 2014/24/EU, but rather of Directive 89/665/EEC as amended by Directive 2007/66/EC. Indeed, as stressed in the Explanatory Memorandum of the PCR2015, “[t]hese Regulations also re-enact the relevant provisions of the Remedies Directives (Directive 89/665/EEC as amended by Directive 2007/66/EC), on remedies and review procedures for public procurement, as implemented by the UK in the Public Contracts Regulations 2009” (para 2.1). For discussion on the topic, see the contributions to S Treumer & F Lichere (eds), Enforcement of the EU public procurement rules(Copenhagen, DJØF, 2011) and, in relation with the need to reform them, see A Sanchez-Graells, “‘If It Ain’t Broke, Don’t Fix It’? EU Requirements of Administrative Oversight and Judicial Protection for Public Contracts”, in S Torricelli & F Folliot Lalliot (eds), Administrative oversight and judicial protection for public contracts (Larcier, 2017) forthcoming.

In that regard, the Explanatory Memorandum also clarifies that “[t]he general approach has been to move the existing remedies rules from the 2006 Regulations into this instrument, with only comparatively minor amendments, including adjustments necessary to mesh with the new Regulations overall and some minor drafting improvements. However, we have taken the opportunity to provide for the remedies to be available not only to economic operators from non-EEA countries where covered by the WTO Agreement on Government Procurement (which the 2006 Regulations did) but also to those from other third countries where required by any other international agreement by which the EU is bound” (para 7.3). Consequently, there are no significant changes resulting from Regulations 85 to 87 PCR2015.

Regulation 85 PCR2015 simply determines that the remedies regulated in Part 3 PCR2015 only apply to contracts covered by Part 2, ie contracts with a value above the EU thresholds (see Regulations 3 and 5 PCR2015.

Notices under Regulation 86 PCR2015

Regulation 86 PCR2015 creates an obligation for contracting authorities to send to each candidate and tenderer, as defined in Regulation 86(7) and (8), a notice communicating its decision to award the contract or conclude the framework agreement Regulation 86(1). The content of those notices is detailed in regulation 86(2) to (5) PCR2015. This is the set of requirements that aim to provide the candidate or tenderer with sufficient information for it to assess whether to challenge the award decision, ultimately as a guarantee of their right effective judicial protection under Article 47 of the Charter of Fundamental Rights of the European Union.

The authors of this commentary have a fundamental disagreement on some of the content of these notices, which carries over from the different viewpoints on broader issues of procurement transparency (see eg Regulation 83 PCR2015). Pedro considers that price disclosure should be part of the cost for suppliers to work in public procurement, and that more procurement transparency is likely to result in more competition. Albert considers that such detailed notices as those required by regulation 86 PCR2015 are the crux of the problem of excessive disclosure of information in the public procurement setting, particularly in view of the obligation to disclose the name of the tenderer to be awarded the contract, or to become a party to the framework agreement [reg.86(2)(c) PCR2015; see discussion in A Sanchez-Graells, The Difficult Balance between Transparency and Competition in Public Procurement: Some Recent Trends in the Case Law of the European Courts and a Look at the New Directives (University of Leicester School of Law Research Paper No. 13-11, 2013)].

In that regard, it is important to stress that Regulation 86(6) PCR2015 creates a straightforward exception to disclosure of certain information whereby a contracting authority may withhold any information where the release of such information (a) would impede law enforcement or would otherwise be contrary to the public interest; (b) would prejudice the legitimate commercial interests of a particular economic operator, whether public or private; or (c) might prejudice fair competition between economic operators. This is coincidental with the same exception in Regulation 55(3) PCR2015. Pedro considers that price disclosure should be part of the cost for suppliers to work in public procurement and in certain markets can incentivise new entrants if prices are too high. Albert disagrees on this point because the actual cost of excessive transparency is unavoidably borne by contracting authorities and, ultimately, tax payers.

Either way, Regulation 86(6) PCR2015 should be interpreted and applied, in conjunction with Regulation 18(2) and (3) PCR2015 establishing the principle of competition. In Albert’s view, this is fundamental to avoid any excesses of transparency in public procurement and their knock-on effect on the ease of cartelisation of public procurement markets. Hence, in Albert’s opinion, contracting authorities will be well-advised to adopt strategies that minimise disclosure of information where possible and proportionate, so that competition is not damaged and incentives to collusion and bid rigging are not exacerbated (for background, see A Sanchez-Graells, “Prevention and Deterrence of Bid Rigging: A Look from the New EU Directive on Public Procurement”, in G Racca & C Yukins (eds), Integrity and Efficiency in Sustainable Public Contracts (Brussels, Bruylant, 2014) 171-198).

Regulation 86(5) PCR2015 sets more limited exceptions whereby contracting authorities need not comply with regulation 86(1) in any of the following cases: (a) where the contract or framework agreement is permitted by Part 2 to be awarded or concluded without prior publication of a contract notice; (b) where the only tenderer is the one who is to be awarded the contract or who is to become a party to the framework agreement, and there are no candidates; (c) where the contracting authority awards a contract under a framework agreement or a dynamic purchasing system. Regarding the latter exception, it is worth stressing that the opacity it creates regarding the working of framework agreements and dynamic purchasing systems may be excessive and that a system of quarterly reporting would be preferable (see here).

The issue of insufficient transparency also affects other of these exceptions. For example, if the contract/framework agreement was awarded without a prior publication of a contract notice, the exception appears strange because it significantly reduces the possibilities of an aggrieved supplier to obtain redress. In addition, any contract awarded inside a framework agreement or a dynamic purchasing system is not subject to this notice and in consequence it is not subject either to a standstill period. We would prefer a standstill period on these as well. These are as much public contracts as the ones at the end of an open procedure, so why should suppliers have fewer rights just due to the process used?

Standstill under Regulation 87 PCR2015

Regulation 87 PCR2015 establishes the so called Alcatel standstill obligation for contracting authorities not to enter into the contract or framework agreement subjected to a regulation 86 notice until a period of 10 or 15 days has elapsed, depending on the means of communication used to send the notices to the interested candidates and tenderers.

Thus, regulation 86 notices are effectively what are traditionally called standstill notices. Once they are served, the contracting authority cannot enter into the contract/framework agreement for a certain period of time. The standstill duration depends on the method used to serve the notice. 10 days is the shortest period, available for electronic notices which we hope mean something a little bit more advanced than email, but our hopes are not pinned very high as “facsimile” is included as an additional method. This 10 day standstill period only applies if all economic operators receive the notice via facsimile or electronic format.

If other notification methods are used, then the duration of the standstill is either 15 days since the remittance (!) of the notification or 10 days of the receipt by the last tenderer, whatever happens first. For discussion of the specific rules on calculation of those time and the UK (Eng & W) case law on this topic, see M Trybus, “An Overview of the United Kingdom Pubic Procurement Review and Remedies System with an Emphasis on England and Wales”, in S Treumer & F Lichere (eds), Enforcement of the EU public procurement rules (Copenhagen, DJØF, 2011) 201, 216-17; and  LRA Butler, “Below Threshold and Annex IIB Service Contracts in the United Kingdom: A Common Law Approach”, in D Dragos & R Caranta (eds), Outside the EU procurement directives – Inside the Treaty? (Copenhagen, DJØF, 2012) 283, 326-29].

Last modified: December 5, 2016 by Pedro Telles

85.  This Chapter applies to contracts and framework agreements falling within the scope of Part 2.

Notices of decisions to award a contract or conclude a framework agreement

86.—(1) Subject to paragraphs (5) and (6), a contracting authority shall send to each candidate and tenderer a notice communicating its decision to award the contract or conclude the framework agreement.

Content of notices

(2) Where it is to be sent to a tenderer, the notice referred to in paragraph (1) shall include—

(a)the criteria for the award of the contract;

(b)the reasons for the decision, including the characteristics and relative advantages of the successful tender, the score (if any) obtained by—

(i)the tenderer which is to receive the notice; and

(ii)the tenderer—

(aa)to be awarded the contract, or

(bb)to become a party to the framework agreement,

and anything required by paragraph (3);

(c)the name of the tenderer—

(i)to be awarded the contract, or

(ii)to become a party to the framework agreement; and

(d)a precise statement of either—

(i)when, in accordance with regulation 87, the standstill period is expected to end and, if relevant, how the timing of its ending might be affected by any and, if so what, contingencies, or

(ii)the date before which the contracting authority will not, in conformity with regulation 87 enter into the contract or conclude the framework agreement.

(3) The reasons referred to in paragraph (2)(b) shall include the reason for any decision by the contracting authority that the economic operator did not meet the technical specifications—

(a)in an equivalent manner as mentioned in regulation 42(14); or

(b)because compliance with a standard, approval, specification or system mentioned in regulation 42(15) does not address the performance or functional requirements laid down by the contracting authority.

(4) Where it is to be sent to a candidate, the notice referred to in paragraph (1) shall include—

(a)the reasons why the candidate was unsuccessful; and

(b)the information mentioned in paragraph (2), but as if the words “and relative advantages” were omitted from sub-paragraph (b).

Exemptions

(5) A contracting authority need not comply with paragraph (1) in any of the following cases:—

(a)where the contract or framework agreement is permitted by Part 2 to be awarded or concluded without prior publication of a contract notice;

(b)where the only tenderer is the one who is to be awarded the contract or who is to become a party to the framework agreement, and there are no candidates;

(c)where the contracting authority awards a contract under a framework agreement or a dynamic purchasing system.

(6) A contracting authority may withhold any information to be provided in accordance with the preceding requirements of this regulation where the release of such information—

(a)would impede law enforcement or would otherwise be contrary to the public interest;

(b)would prejudice the legitimate commercial interests of a particular economic operator, whether public or private; or

(c)might prejudice fair competition between economic operators.

Meaning of “candidate” and “tenderer”

(7) In this regulation,—

(a)“candidate” means a candidate, as defined in regulation 2(1), which—

(i)is not a tenderer, and

(ii)has not been informed of the rejection of its application and the reasons for it;

(b)“tenderer” means a tenderer, as defined in regulation 2(1), which has not been definitively excluded.

(8) For the purposes of paragraph (7)(b), an exclusion is definitive if, and only if, the tenderer has been notified of the exclusion and either—

(a)the exclusion has been held to be lawful in proceedings under Chapter 6; or

(b)the time limit for starting such proceedings has expired even on the assumption that the Court would have granted the maximum extension permitted by regulation 92(4) and (5).

Standstill period

87.—(1) Where regulation 86(1) applies, the contracting authority must not enter into the contract or conclude the framework agreement before the end of the standstill period.

(2) Where the contracting authority sends a regulation 86 notice to all the relevant economic operators by facsimile or electronic means, the standstill period ends at midnight at the end of the 10th day after the relevant sending date.

(3) Where the contracting authority sends a regulation 86 notice to all the relevant economic operators only by other means, the standstill period ends at whichever of the following occurs first:—

(a)midnight at the end of the 15th day after the relevant sending date;

(b)midnight at the end of 10th day after the date on which the last of the economic operators to receive such a notice receives it.

(4) In paragraphs (2) and (3), “the relevant sending date” means the date on which the regulation 86 notice is sent to the relevant economic operators, and if the notices are sent to different relevant economic operators on different dates, the relevant sending date is the date on which the last of the notices is sent.

(5) Where the contracting authority sends the regulation 86 notice to one or more of the relevant economic operators by facsimile or electronic means and to the others by other means, the standstill period ends at whichever of the following two times occurs latest:—

(a)midnight at the end of the 10th day after the date on which the last notice is sent by facsimile or electronic means;

(b)the time when whichever of the following occurs first:—

(i)midnight at the end of the 15th day after the date on which the last notice is sent by other means;

(ii)midnight at the end of the 10th day after the date on which the last of the economic operators to receive a notice sent by any such other means receives it.

(6) In this regulation—

“regulation 86 notice” means a notice given in accordance with regulation 86; and

“relevant economic operators” means economic operators to which regulation 86 requires a notice to be sent.