Procurement Pulse UK – January 2024

This is the Procurement Pulse, DLA Piper’s bulletin for clients with an interest in developments in public procurement law. In this issue we report on recent UK case-law, policy and legislative developments.

RECENT COURT JUDGMENTS

English High Court Considers Whether Losses Suffered by Intra-group Companies are Relevant When Lifting an Automatic Suspension

Teleperformance Contact Ltd v Secretary of State for the Home Department and another

The High Court has lifted the automatic suspension regarding the procurement for the delivery of the UK's global visa and immigration network. The claimant, Teleperformance Contact Ltd, the current service provider, contended that it would suffer significant prejudice if the suspension was lifted as it said it would lose over 70% of its global visas business and result in many redundancies. That business was conducted through a range of companies in the Teleperformance group, and not solely through the claimant. It was those other group companies that would primarily suffer the financial loss and redundancies complained of, and none were claimants in this case. The court concluded that the question of any loss or damage to other companies in the claimant’s group was not relevant to the question of whether damages would be an adequate remedy for the claimant if the automatic suspension was lifted. This decision confirms that where the claimant is the member of a group, a court will not consider losses to intra-group companies when deciding whether to lift the automatic suspension. It is the case, therefore, that more often than not damages will be an adequate remedy irrespective of the structure of the organisation.

English High Court Rules on Limitation in Public Procurement Challenges to Direct Awards

Brookhouse Group Limited v Lancashire County Council

In this case the High Court provided important clarification on the limitation periods for claims seeking a declaration of ineffectiveness in respect of public contracts awarded without competition (direct awards). The court held that a contracting authority cannot rely on Regulation 93(5) of the Public Contract Regulations 2015, which allows a “summary of relevant reasons” to be provided to shorten the limitation period for a declaration of ineffectiveness from six months to 30 days, unless a competitive tendering exercise has been carried out. The “relevant reasons” refer to the reasons to be provided under regulation 55(2). That provision presupposes a competitive procurement in which identified candidates and tenderers have submitted a request to participate or a tender. As no such competition was conducted in this case the Council's limitation defence was struck out. The Court held that the sole way to shorten the limitation period in the circumstances of this case would be through a contract award notice that includes justification for awarding the contract without prior publication of a contract notice. Contracting authorities making direct awards should note the importance of issuing a contract notice to reduce the limitation period and the inability to use the summary of relevant reasons under regulation 93(5) to do so.

POLICY, GUIDANCE AND OTHER DEVELOPMENTS

Procurement Act 2023

Following a period of ping-pong between the House of Lords and the House of Commons the UK Parliament passed the Procurement Bill on 24 October 2024. It received Royal Assent on 26 October 2024. Secondary legislation will be required to bring the substantive elements of the Act into effect. The UK government has promised to give contracting authorities and suppliers a minimum of six months to prepare before the new regime takes effect. The government stated in June 2023 that it expected the new regime to be implemented in October 2024.

Various documents relating to the Act have been published, including:

• The final text of the Procurement Act 2023.
• Procurement Act Short Guides.
• Official Cabinet Office Learning Offer on the Act.

We have recently launched our UK public procurement reform webpage which collates expert analysis on the new procurement regime, commentary on developments and key materials and resources. Recent publications on our webpage include:

• The Procurement Act has received Royal Assent.
• The Act: Briefing for Suppliers.

You can also view our recent webinar on the Procurement Act here.

Cabinet Office and GCF Publishes Public Procurement Innovation Guide

The UK government has published “Transforming Public Procurement: Our Innovation Ambition”, which provides guidance on how the changes to the public procurement regime introduced by the Procurement Act 2023 will encourage innovation by both contracting authorities and suppliers. We have written an article about the guidance which is available here.

Public Procurement Thresholds for 2024

The UK and Scottish governments have published new legislation here and here respectively which updates the minimum financial thresholds for public procurement. The revised thresholds take effect from 1 January 2024 and contracting authorities will need to observe them. Competitions commenced prior to 1 January 2024 will be subject to the previous thresholds.

New Procurement Policy Notes

Several new procurement policy notes have been issued by the UK, Scottish and Welsh Governments:

• PPN 10/23 which sets out how payment approaches can be considered in the procurement of major government contracts.
• PPN 9/23 updating the Cyber Essentials Scheme.
• PPN 11/23 and SPPN 5/23 updating on changes to the procurement thresholds.
• PPN 12/23 and SPPN 4/23 which gives notice of changes to Scottish procurement legislation to reflect North Macedonia’s accession to the WTO’s Agreement on Government Procurement.
• WPPN 2/23 setting out changes to public procurement obligations arising from free trade agreements with Australia and New Zealand.

Developments in Public Procurement Law in Wales

The Health Service Procurement (Wales) Bill was passed at stage 4 by the Senedd on 14 November 2023. The Bill confers regulation-making powers that will allow the Welsh Government to establish a new health service procurement regime in Wales. The Welsh Government has also published a consultation on health service procurement in Wales and whether it should differ from how England procures health services. The consultation closes on 23 February 2024.

Separately, the Welsh Government has published information about the membership and procedures of the Social Partnership Council introduced under the Social Partnership and Public Procurement (Wales) Act 2023.

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