Public Procurement Update: Autumn 2022

Procurement Bill introduced to Parliament

The government’s much-anticipated Procurement Bill was introduced to Parliament in May 2022. It’s currently at committee stage in the House of Lords, where the separate parts of the Bill are examined in detail line by line. Consideration of the Bill will move to the House of Commons once the stages in the House of Lords are complete.

The Bill follows on from the government’s 2021 consultation on ‘Transforming Public Procurement’. We discussed the government’s consultation response in an earlier briefing. The government has since published a landing page with a wealth of materials on the new regime, which will reform the existing EU rules. They include a factsheet outlining the regime’s key benefits and a summary guide to the provisions in the Bill.

In terms of timing, the government says that the Bill will take several months to complete its passage through Parliament. Once the Bill is passed, regulations will need to be made to bring some of its provisions and the wider regime into effect. A minimum of six months’ notice will be given before “go-live”, which will not be until 2023 at the earliest. Until then, the existing legislation applies. It will also continue to apply to procurements started under the old rules. Transition guidance will be published and there will be a comprehensive programme of learning and development.

Watch out for our series of briefings covering different parts of the Bill in the run-up to implementation. Sign-up here.

Separately, a Social Partnership and Public Procurement (Wales) Bill was introduced to the Welsh Parliament. It provides for a framework to enhance the well-being of the people of Wales by improving public services through social partnership working, promoting fair work and socially responsible public procurement.

Government publishes procurement transparency policy paper

In related news, the government published a policy paper ‘Transforming Public Procurement – our transparency ambition’.

In the introduction, the government says that while there is already a high level of transparency of UK public procurement, our existing rules and systems have room for improvement. The foundation of the transparency reforms is a new procurement ‘noticing’ regime, covering the full lifecycle of public procurement, from planning through to contract expiry. The new notices are outlined in the Procurement Bill and further detail on their content will be set out in the regulations that follow.

The government also wants to improve the tools that contracting authorities, suppliers and the public have access to, in order to better share information and understand procurement activity across the entire public sector.

The policy paper outlines the government’s proposals to dramatically improve transparency of UK public contracts and spending in greater detail, covering: the government’s vision for procurement transparency in the UK; why it’s needed; what the government’s proposing to do; and where we go from here.

Judicial Review and Courts Act 2022 passed

The Judicial Review and Courts Act 2022 received Royal Assent on 28 April 2022 and the judicial review provisions came into force on 14 July 2022.

The Act attracted significant controversy before it was passed because of the proposed introduction of prospective-only quashing orders and inclusion of a statutory presumption in favour of using suspended or prospective-only quashing orders over an ordinary quashing order. While the presumption did not make it through to the final cut, the Act does give the courts a discretion to provide prospective-only remedies.

Under the Act, a quashing order may include provision: for the quashing not to take effect until a date specified in the order (i.e. a ‘suspended quashing order); removing or limiting any retrospective effect of the quashing (i.e. a ‘prospective quashing order’, where the courts can declare an action or decision unlawful onwards from a particular point).

For suspended quashing orders, the action/decision being quashed is upheld until the quashing takes effect and treated as if its validity and force had been unimpaired by the relevant defect. Any retrospective effect once the quashing takes effect is not limited (including in relation to the period between the making of the order and the taking effect of the quashing).

For prospective quashing orders, the action/decision is upheld in any respect in which the provision prevents it from being quashed, and is treated as if its validity and force had been unimpaired by the relevant defect.

Both types of order may be made subject to conditions and there is a non-exhaustive list of factors that the court must have regard to in deciding whether to make such an order. It will be interesting to see how the courts apply these factors in practice, particularly given the concerns over prospective-only remedies.

The Act also removes a person’s ability to judicially review a decision of the Upper Tribunal to refuse permission to appeal from the First-tier Tribunal.

Case law developments

The decision in Braceurself v NHS England [1] highlighted the fact-specific exercise undertaken by the court when assessing whether there is a “sufficiently serious” breach of procurement law to justify the award of damages. The court distinguished the case from previous authority to find that, even though the valuable contract would have been awarded to the claimant if it had not been for the defendant’s manifest error when scoring the claimant’s bid, damages were still not justified where the procurement was otherwise well run. See our recent briefing for details.

Consultant Connect v NHS Bath [2] is a rare public procurement decision which covers legal and practical advice on the use of framework agreements, contract shortening and civil penalties. See our recent briefing on the key lessons arising from this case.

In Camelot UK Lotteries v The Gambling Commission [3] the court held that an application for an expedited trial of two procurement challenges could not sensibly or appropriately be dealt with until the application to lift the automatic suspension had been decided at a hearing scheduled for three weeks later.

The court noted that while there is no rigid rule, generally any question of expedition is dealt with at the same time as the application to lift because they can have a mutual effect on each other. If the stay was lifted, Camelot would be left with a damages-only claim and there would be no need for expedition. The proposed timetable was also wholly unrealistic and would cause prejudice to the other parties. This was a very important procurement challenge for all parties and it would not be a good administration of justice to end up with a rushed trial. There was little that could realistically be done anyway in the three weeks left before the application to lift hearing, with the parties already under a tight timetable preparing for that hearing. Setting a provisional trial date now would also not accord with good administration of justice in circumstances where it could become academic in three weeks’ time.

In The Good Law Project v Secretary of State for Health and Social Care [4] the Court of Appeal dismissed an appeal against a High Court decision where a judicial review claim form was served one day late and the court declined to extend time or authorise service retrospectively [5]. The claimant sent the sealed (issued) copy of the claim form to the defendant’s solicitors in time but this was not the nominated address for service.

In a sobering reminder to litigating parties, the Court of Appeal reiterated that the procedural rules on service are clear, as was the defendant’s nominated address for service. Compliance with the rules is part of the overriding objective in the Civil Procedure Rules (CPR). The availability of email communications does not lessen the importance of strict compliance, although it may mean that even greater care needs to be taken when it comes to service formalities. It was important to emphasise (again) that valid service of a claim form is the basis of the court’s jurisdiction over the defendant. Parties who fail, without good reason, to take reasonable steps to effect valid service, in circumstances where a relevant limitation period is about to expire, expose themselves to the very real risk of losing the right to bring their claim.

The Court of Appeal acknowledged that the consequences of the error in service may seem harsh in circumstances where the sealed claim form was sent to the defendant’s lawyers within the deadline. But the relevant procedural rule is not a generous provision for claimants where there are no obstacles to valid service of a claim form within time. The power to validate will not necessarily be exercised even when the defendant, either itself or through its solicitors, is fully on notice within time and the only prejudice to the defendant would be the loss of an accrued limitation defence.

Although it did not ultimately affect the outcome, the High Court judge had incorrectly applied the three-stage Denton test when refusing to grant an extension of time for service under the court’s general case management power in CPR 3.1. The Court of Appeal clarified that for extensions of time for service of a judicial review claim form, whilst CPR 7.6 does not directly apply, its principles are to be followed instead. Therefore unless a claimant has taken all reasonable steps to comply with CPR 54.7 but has been unable to do so, time for service should not be extended. CPR 54.7 is the rule that requires service of the judicial review claim form on the defendant within seven days after the issue date.

In a separate case, it was reported that the High Court granted The Good Law Project a costs capping order in a judicial review claim against the Department for Health and Social Care (DHSC). The case concerns a £22.6 million personal protection equipment contract awarded at the start of the pandemic to Bunzl Healthcare. The campaign group apparently described the DHSC’s estimated £1.2 million in costs as an existential threat. Despite the DHSC’s arguments that the test for a cap was not met because the claim did not amount to ‘public interest proceedings’, and that The Good Law Project did not have standing, the High Court ruled that these were public interest proceedings and granted an order with a reciprocal cap of £300,000. It was also arguable that The Good Law Project had standing in the case.

And finally, in yet another case involving the award of public procurement contracts during the Covid-19 pandemic [6], The Good Law Project was this time unsuccessful on all fronts, with the court potentially seeming to row back from its previous position on standing.

Round-up of other news

• The Cabinet Office published Procurement Policy Note 01/22 on how contracting authorities can further cut ties with companies backed by the states of Russia and Belarus.

• In related news, the Local Government (Exclusion of Non-commercial Considerations) (England) Order 2022 came into force on 1 July 2022. Its purpose is to enable best value authorities and parish councils in England to terminate, if they wish to, proposed or subsisting public supply or works contracts either where the country or territory of origin of supplies to the contractor is the Russian Federation or Republic of Belarus or where either of these is the location of the business activities or interests of a contractor (including suppliers and subcontractors).

• The Public Procurement (International Trade Agreements) (Amendment) Regulations 2022 came into force on 27 June 2022. They give effect to the UK’s procurement obligations under the Free Trade Agreement between the UK and Iceland, Liechtenstein and Norway by extending the rights afforded to operators and the duties owed to them by contracting authorities under the Public Contracts Regulations 2015 (PCR), Concession Contracts Regulations 2016 and the Utilities Contracts Regulations 2016 (UCR) to economic operators in those countries. They also amend the PCR and the UCR to make it clear that an operator’s explanation for an abnormally low tender may include an explanation of whether the price takes into account the grant of subsidies.

• The Cabinet Office updated the Consultancy Playbook and issued an accompanying guidance note on prioritising knowledge generation and knowledge and skills transfer. Also see the related Procurement Policy Note 02/22.

• The Cabinet Office and Government Legal Service published the latest version of the Short Form Contract and guidance for buyers on how to use it.

• The Local Government Association published a refresh of the National Procurement Strategy for Local Government in England and an accompanying toolkit.

• The Administrative Court updated its Information for Court Users on the practical measures that will remain in place until further notice, to assist the court to deal with its business as efficiently as possible. These are incorporated in Annex 7 of the Court’s recently published Judicial Review Guide 2022.

• The Government Legal Department published its latest ‘The Judge Over Your Shoulder’ guidance to help civil servants when advising ministers and government on decision making. Among other things, it contains recent examples from case law involving The Good Law Project.

Did you see…

…our recent briefing on project agreements and the cost of living crisis? Rising costs are likely to be a key issue for long term contracts, including PPP and PFI contracts, where prices and the ability to increase them may have been fixed at the outset. The current economic climate will also mean increased scrutiny on costs. We examined some of the key contractual issues relevant for both public sector bodies and private contractors.

Watch out for…

…our webinar on 23 November 2022 on variations of public contracts. Register here.

Need advice or assistance?

If you need advice or assistance, or have queries concerning any of the points raised in this update, please contact Lynsey or Kathryn, who will be very happy to help.

[1] Braceurself Limited v NHS England [2022] EWHC 2348 (TCC)

[2] Consultant Connect Limited v (1) NHS Bath and North East Somerset, Swindon and Wiltshire Integrated Care Board, (2) NHS Gloucestershire Integrated Care Board and (3) NHS Bristol, North Somerset and South Gloucestershire Integrated Care Board [2022] EWHC 2037 (TCC)

[3] Camelot UK Lotteries Limited v The Gambling Commission and International Game Technology plc v The Gambling Commission [2022] EWHC 1102 (TCC)

[4] R (on the application of The Good Law Project) v The Secretary of State for Health and Social Care v Pharmaceuticals Direct Limited [2022] EWCA Civ 355

[5] See our earlier briefing on the High Court’s decision

[6] R (on the application of The Good Law Project Limited) v The Secretary of State for Health and Social Care v Abingdon Health plc [2022] EWHC 2468 (TCC)