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Public Procurement Law Update

Updates covering the latest public procurement issues on legislation, policy and cases in this fast moving area of law.

Latest Issue

In the latest edition of our Public Procurement Law Update, we cover the conclusions of the European Commission following its review of the Remedies Directives, and the most recent guidance issued by the Crown Commercial Service. We also report on a number of recent cases.

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New Public Procurement Thresholds for 2018

Friday 22nd December 2017

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On 18 December 2017, the European Commission set out the new minimum financial thresholds for contracts caught by the application of EU public procurement law. The new thresholds apply from 1 January 2018 and will remain fixed for the next two years.

The Public Contract Regulations 2015, the Utilities Contracts Regulations 2016 and the Concession Contracts Regulations 2016 regulate the procurement activities of ‘contracting authorities’ and ‘utilities’ in England and Wales. ‘Utilities’ include ports, airports and energy providers while ‘contracting authorities’ including governmental bodies, councils and other public bodies such as universities and registered providers for social housing. The regulations implement the three 2014 EU Directives governing public procurement law.

Every two years, the European Commission updates the minimum financial thresholds to which the EU Directives, and therefore the Regulations, apply. Where contracting authorities and utilities procure contracts for goods, works or services (or procure works or services concession contracts) which are of a value that exceed the minimum financial thresholds, the full regime of public procurement law applies. This is often known as an ‘OJEU procurement’ because of the need to advertise the requirement in the Official Journal of the European Union (OJEU).

As in previous years, the European Commission has again increased the minimum financial thresholds, as measured in Euros. The European Commission has prepared a document setting out the corresponding values to thresholds in the national currencies of each non-euro zone member states. As the UK is still currently a member of the European Union, the conversion document has included the corresponding value in sterling. The good news is that thanks to the weaker Pound against the Euro, the financial thresholds in sterling have increased for the first time in several years; long-time practitioners may remember that previously the strength of the Pound against the Euro in both 2013 and 2015 meant the thresholds decreased in the UK despite increasing in Eurozone countries.

Set out in below in bold text are the new sterling threshold rates that apply from 1 January 2018. The pre 2018 threshold rates are set out in brackets.

Public Contracts Regulations 2015 (PCR 2015)





Central Government Bodies






(£106, 047)


Other Contracting Authorities









The threshold for light touch (social and similar services) has now increased to £615,278. This is an increase from the previous £589,148. It should be noted that the threshold at EU level has not increased, however due to exchange rates the threshold in sterling has.

Utilities Contract Regulations 2016 (UCR 2016)





All sectors









Light touch (social and similar services) procured under the UCR 2016 has increased to £820,370. As with the PCR 2015, there has been no increase at EU level but the threshold in sterling has increased.

Concession Contracts Regulation 2016 (CCR 2016)

The threshold for concession contracts has increased to £4,551,413, up from £4,104,394.

The latest decision on thresholds is good news to domestic contracting authorities and utilities. After two consecutive decreases in domestic minimum financial thresholds, this is the first real increase for some time. It should be noted, however, that thanks to Brexit it is unclear whether the UK will be included official conversions of future changes to the minimum thresholds mandated by the European Commission and, if not, whether the UK government would seek to regularly revise the thresholds itself or move domestic thresholds to keep them in line with their EU equivalents.

For more information on any public procurement issues, please contact Michael Winder on 0151 600 3085 or by email to or speak to a member of our Public Procurement team. 

Procurement process: dealing with abnormally low tenders

Tuesday 14th November 2017

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The recent case of Agriconsulting Europe v European Commission concerned an appeal against the rejection by a contracting authority of a tender which it considered to be ‘abnormally low’. What protection is there for a bidder submitting a genuine bid which is then rejected for being abnormally low? Also, the counter argument, what protection is there for a tenderer who considers that a procuring authority has awarded a contract to a supplier who has submitted an abnormally low tender?

In this case, Agriconsulting had submitted a bid in response to a contract notice published by the European Commission. Agriconsulting was notified that its bid had been unsuccessful because it had failed to reach the minimum score and because its tender was abnormally low in relation to the price offered for the performance of additional tasks. In the facts of the case, it was stated that the Commission’s evaluation committee had identified the tender as being abnormally low by comparing the amount of that tender to the total maximum budget, as set out by the Commission. There were two bidders left at the price evaluation stage and whilst one bidder was slightly lower than the budget set by the Commission, Agriconsulting’s price was approximately 40% lower. The Commission requested information from Agriconsulting which responded with explanations and a breakdown of the proposed prices for the contract. The Commission found there to be an overlap between tasks which it considered did not comply with the tender specification and concluded that the tender submission did not meet the minimum score required by the tender specification and that the bid was abnormally low. The Commission rejected the tender.

An appeal to the General Court was dismissed in its entirety and Agriconsulting subsequently appealed to the ECJ. The ECJ also dismissed the appeal, noting that nothing prevented the contracting authority from comparing tenders with the estimated budget in the tender specifications and from identifying one of them as being abnormally low where the amount of that tender was considerably lower than the estimated budget. The ECJ held that it was for the contracting authority to determine the method used to identify abnormally low tenders provided that such method was objective and non-discriminatory.

Under the Public Contracts Regulations 2015 when a contracting authority identifies a tender that it considers to be abnormally low, it is obliged to require the tenderer to explain the price or costs proposed in the tender. The contracting authority is required to assess the information provided and may only reject the tender where the evidence supplied “does not satisfactorily account for the low level of price or costs proposed”. However, there is no definition of what constitutes an abnormally low tender. Some factors which may indicate an abnormally low tender include:

• A tender which contains significant variations from the other bids;
• A tender that is below what the contracting authority was expecting based on its own market knowledge and costings, but query how far below;
• A greater transfer of risk to the authority combined with a lower price.

There is therefore an opportunity for a supplier who submits a tender which is deemed to be ‘abnormally low’ to demonstrate that the price submitted is genuine and based on realistic assumptions. Equally if an unsuccessful supplier claims an ‘abnormally low’ tender has won, there is the opportunity to ensure due process has been followed and to challenge a procurement process that does not comply with all of the tender requirements.

Contracting authorities must identify and be cognisant of the risks associated with abnormally low tenders. If the tender is low and the supplier has submitted a low tender as part of a wider procurement strategy to enter into a market, this could be a valid opportunity for the contracting authority. However the danger is that if the tender is unrealistic, it could ultimately lead to higher costs and/or performance issues during the life of the contract and the risk of a procurement challenge by an unsuccessful bidder.

If you have any queries regarding the evaluation process, or public procurement law in general, please visit our procurement page or contact public procurement lawyer, Victoria Trigwell.

“Early” is the word for public procurement cases

Thursday 24th August 2017

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The Technology and Construction Court (TCC) has produced a guidance note on procedures for public procurement cases. The note aims to streamline management of such cases, acknowledging that short limitation and mandatory standstill periods can lead to legal proceedings being “issued hastily”.                                                                                                                                               
Key points from the note include:

Pre-Action and Alternative Dispute Resolution (ADR)

  • With the mandatory standstill period being only 10 days long, potential claimants must act quickly to obtain automatic suspension of the contract award. A pre-action process is recommended to the extent that it is practical and does not take up too much time. This aims to enable parties to settle issues without the need to start proceedings, as well as exchange information and consider ADR.
  • The recommended pre-action process is as follows:
  • The potential claimant should send a letter before claim to the contracting authority. This should identify the procurement process being challenged; the grounds for the claim (both factual and legal); any information sought from the authority; the remedy required; any request for an extended standstill period; and an appropriate time limit for a response.
  • The authority should respond with an acknowledgement of receipt of the letter before claim, give its solicitors’ details, and indicate whether the standstill has been extended.
  • The parties should continue to resolve the dispute without the need to commence proceedings. Communication should be co-operative and reasonable, and ADR processes are encouraged throughout proceedings.

Institution of Proceedings

  • The Claim Form must be served on the defendant within 7 days after the date of issue, and the Particulars of Claim must be served no later than this.
  • If the Particulars of Claim contain confidential information, both a confidential and non-confidential (i.e. redacted) version of the pleading should be lodged with the Court. The former should be clearly marked as confidential on paper and envelope. An order should be sought by letter (and copied to any relevant parties) that access to the Court file be restricted.

Specific and Early Disclosure

  • Early disclosure may be justified to enable the claimant to plead its case properly, and “contracting authorities are encouraged to provide their key decision making materials at a very early stage of proceedings or during any pre-action correspondence”, in order to avoid additional early proceedings to secure disclosure.
  • In practice, this means authorities will have to provide relevant information fairly soon after the pre-action letter. The question of disclosure will be considered at the first Case Management Conference (CMC), which itself may be early if appropriate.


  • The note stresses the importance of general confidentiality, while seeking to avoid “unnecessary cost or complexity”. It advises confidential papers to be clearly marked or stamped as such, suggesting coloured paper to be used for immediate identification.
  • Confidentiality rings are becoming increasingly common. However, due to increased cost and complexity, a two-tier ring must be justified early on. A “two-tier” ring may be considered, with employee representatives having access to some but not all of the material disclosed in the ring – only what they need to know.

Interested Parties

  • The successful bidder may be affected by the relief sought in a procurement claim, which typically involves setting aside the award decision in their favour. The Court can consider an interested party, besides the claimant and authority, to become a full party to the proceedings. This may involve providing relevant documentation – once again, the note stresses this must happen “as soon as practicable”.

This guidance note can assist claimants, authorities, and other interested parties by laying out a procedure. The note is, however, incredibly ambitious – asking a lot from these parties, and as soon as possible. The fast-paced nature of procurement proceedings requires this, but it presents a mammoth task to all parties. Getting in touch with external legal advisors early on is therefore necessary for a successful procurement claim or defence.  

For any queries regarding preparation of your tender documents, the evaluation process, or public procurement law in general, please visit our procurement page or contact Richard Hough.

Court of Justice for the European Union (“CJEU”) considers clarification of tenders

Tuesday 11th July 2017

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Clarification of tender submissions can be a minefield for contracting authorities. In addition, the growing trend for tender submissions being submitted electronically through a portal, can lead to additional problems such as tender documents not uploading correctly or incorrect documents being uploaded. Even where the tender submission is complete, answers may assume knowledge on the part of the reader that the contracting authority may not have, e.g. because the answer is very technical.

Contracting authority’s desire to be able to receive complete tender submissions and understand them can put it at risk of breaching its overarching general duties of transparency and equal treatment of bidders. So how far can a contracting authority go in order to clarify a tender before it is in breach of their duties?

The Public Contracts Regulations 2015 (the Regulations), which derive from European Directive 2014/24 provide the framework within which a contracting authority may provide goods, works or services. Regulation 76(2) sets out a contracting authority’s equal treatment and transparency.

Regulation 67(8) states that in the case of doubt, contracting authorities shall verify the “accuracy of the information and proof provided by tenderers”. Regulation 69 places a separate requirement on contracting authorities to get bidders to explain their costings if their bids are considered to be abnormally low in price.

The issue of clarification has of course been previously considered by the courts; the leading case being from 2014 . In these earlier cases, the CJEU confirmed that the principle of equal treatment does not prevent a contracting authority from seeking a genuine clarification or correction of obvious errors, provided that:

  • The request must not be made until all tenders have been reviewed by the contracting authority.
  • A request for clarification should be sent to an all bidders in the same situation.
  • A request for clarification must relate to all sections of the tender which require clarification.
  • The request should not lead to the submission of missing documents or information which should have been included in the original tender, i.e. a request for clarification cannot lead to the submission of what would be in effect a new tender.
  • Contracting authorities should treat bidders equally and fairly so that a request for clarification does not (or does not appear) to have unduly favoured or disadvantaged the bidder who receives the clarification.

A recent Polish case  was referred to the CJEU for clarification regarding the late submission of samples by bidders, where incorrect samples had previously been provided. This afforded the CJEU a chance to consider further this aspect of public procurement law.

In this case, the referring court asked the CJEU if the principle of equal treatment allowed contracting authorities to invite bidders to correct or submit further information or documents in order to complete a tender submission after the deadline had passed.

The CJEU confirmed the principle of equal treatment means that all bidders must have equality of opportunity when they are formulating tender submissions. This implies that the tenders of all bidders should be subject to the same conditions. It also confirmed that the nature of the restricted procedure under the Regulations (as was the case here) precludes any negotiations after the submission of the tenders. Therefore after submission of a tender, the tender can no longer be amended at the request of the contracting authority’s or the bidder. To allow a late submission of a key part of the tender submission in order to provide clarification would in effect be a confidential negotiation with one bidder, a breach of the duty of equal treatment.

The CJEU noted that, given the settled case law, the principle of equal treatment means that a contracting authority cannot invite or permit late submission of documents or information that were required to be a provided as part of the tender within the time limit set for the public procurement procedure.  The principle of equal treatment however does not prevent a contracting authority from inviting a bidder to clarify a tender, or to correct an obvious clerical error, subject to the conditions established to ensure the equal treatment, as set out in the bullet points above. It was up to the Polish courts to determine where the facts of the case pointed, i.e. correction of an obvious error, and therefore permitted, or the submission of further information which is not.

The recent case demonstrates that the law is becoming fairly settled on this point. While there is flexibility (within limits) to clarify minor errors or confusing aspects of tenders, contracting authorities cannot seek late submission/late revised submission of information that was required as part of the tender submission or the introduction of new information. This is because the submission is such information would breach the principles of equal treatment of bidders and would in reality constitute a new tender.

For any queries regarding requests for clarification of tenders or public procurement in general, please contact Richard Hough on 0151 600 3302 or at

Are damages an adequate remedy for the loss of a contract?

Friday 7th July 2017

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Public Procurement Law Update - July 2017

The recent case of Alstom Transport UK Ltd v London Underground Ltd and another [2017] EWHC 1521 (TCC) arose out of a procurement for the provision of AC traction motors for London Underground Limited’s (LUL) fleet of Central Line trains. Bombardier won the tender and Alstom, who came in second place, challenged the result, triggering an automatic suspension on LUL’s ability to enter into the contract with Bombardier. 

Alstom sought an order that: (i) LUL’s decision to award the contract to Bombardier be set aside: (ii) that LUL were in breach of the Utilities Contracts Regulations; and (iii) a declaration that the contract should be awarded to Alstom. Alstom claimed that damages alone would not be an adequate remedy because of the damage the loss of the contract would have on its business, not only due to the loss of value of the contract but also the loss in its expertise and therefore its ability to win future contracts. Alstom argued that the procurement had already been delayed and therefore the effect on LUL of delaying the contract until after the full claim had been heard would be insignificant.

The central issue in dispute was whether Bombardier should have been rejected from the tender process for failing to meet pre-determined minimum thresholds at the end of stage 3 of the procurement. The ITT stated that any failure to meet the minimum thresholds would be treated as non-compliance. However, the ITT also reserved to LUL the right to reject a response, re-open stages of the process, request re-submissions of parts of a response and to request further information in relation to a submission. The recommendation document endorsed by LUL’s Evaluation Board recognised that Bombardier had not met the minimum thresholds for passing stage 3 but recommended that “in order to maintain tender competition, all three bidders are considered to have met the requirements for stage 3 and have proceeded to the stage 4 Evaluation”. The Court stated that if there were “even a whiff of corruption” any court would regard that as a feature tending to support the maintenance of the automatic stay. However, the Court found no such evidence in this case.

The Court followed the principles set out American Cyanamid and found firstly, that it only needed to be satisfied that there was a serious issue to be tried but that it should not undertake a trial of the issues; and secondly, that if damages were an adequate remedy, that would normally (but not always) be sufficient to defeat an application for an interim injunction. 

In response to Alstom’s claim that damages would not be an adequate remedy, the Court referred to Alstom's published accounts in relation to its existing facilities and investment and its place as a market leader in the United Kingdom and globally. It referred to its order book income of £65 million on annual sales of £600 million and it seemed sceptical of claims that the loss of the LUL contract would cause it to lose its expertise and competitive edge.

The Court concluded that damages would be an adequate remedy for Alstom and that a claim for loss of profits could be formulated by reference to Alstom’s profits on contracts historically, its projected profit on the tendered contract and the costs it had occurred in tendering for the contract.

In response to the claim that further delay caused by the injunction would be insignificant, the Court found that the evidence put forward by LUL which pointed to the current traction systems needing to be replaced sooner rather than later supported lifting the automatic suspension so that the contract with Bombardier could be concluded.

Whilst questions have certainly been raised regarding LUL’s conduct of the procurement, the key issue for this application was not the strength of Alstom’s case but the importance to public procurement law claims of the principles previously set out in America Cyanamid and the courts’ willingness to apply them when determining the issue of whether damages would be an adequate remedy for the alleged breach of the Utilities Contracts Regulations.

For any queries regarding preparation of your tender documents, the evaluation process, or public procurement law in general, please visit our procurement page or contact public procurement lawyer Victoria Trigwell.


Public Procurement: Potential Developments for Subsidiaries of Contracting Authorities

Tuesday 23rd May 2017

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On 27 April 2017 the Advocate General issued an opinion in respect of the Lithuanian case of LitSpecMet UAB v Vilniaus lokomotyvu remonto depas UAB and another regarding the status under public procurement law of subsidiaries to Contracting Authorities.

Many Contracting Authorities, such as councils and registered providers of social housing, set up subsidiary companies for specific purposes. Some of these subsidiary companies are used as special purpose vehicles for the provision of specific functions for the Contracting Authority or its wider group, for example a development company arm or a repair company for the Contracting Authority’s housing stock.

Often such companies are able to use the in-house or Teckal exemption provided under public procurement law in order to provide the relevant services to the Contracting Authority without having to competitively tender for them. For our articles on when the Teckal exemption can apply, see here.  Other subsidiary companies trade on the wider market as an income generating vehicle which helps the Contracting Authority either offset costs or have greater income to provide its core services. In either case, it is necessary to consider whether the Public Contracts Regulations 2015 (the “Regulations”) apply to such subsidiaries when they in turn need to purchase goods, works or services by determining whether the subsidiary is a Contracting Authority in its own right.

Under the Regulations, and the European Directives from which the Regulations come, the definition of a Contracting Authority includes a list of specific bodies, including “bodies governed by public law”. This is in turn defined as anybody:

  • Established for the specific purpose of meeting needs in the general interest, not having an industrial or commercial character; and
  • Having legal personality; and
  • Any of: (a) financed, for the most part, by the state, regional or local authorities, or other bodies governed by public law, or (b) subject to management supervision by those bodies, or (c) having a board, more than half of whose members are appointed by the state, regional or local authorities, or by other bodies governed by public law.

A subsidiary must meet all of the main criteria to be a Contracting Authority in its own right. Currently eligibility to use the Teckal exemption does not automatically confer status as a body governed by public law.

The question considered by the Advocate General arose from a challenge to a tendering process by VLRD, a company wholly owned by the Lithuanian State railway company (which is itself a Contracting Authority, and hereafter known as “LG”). VLDR provides goods and services to LG and the Advocate General was asked to determine whether VLRD was a Contracting Authority. VLRD had argued that it was not a body governed by public law as it was not established for the ‘purpose of meeting needs in the general interest, not having an industrial or commercial character’.

The Advocate General recommended that the definitions of Contracting Authority and body governed by public law must be interpreted as meaning that:

  • A company that is connected to a Contracting Authority in terms of substance and function such that the Teckal exemption applies, is subject to the Regulations when it is concluding works, supply and service contracts with third parties for the purpose of performing the task entrusted to it by the parent Contracting Authority; and
  • In any event, a company should be considered a body governed by public law where it has legal personality, is controlled by a Contracting Authority and the essential part of its activity is to supply the parent Contracting Authority goods or services, free of any pressure from competitors and not in free market conditions, which enables the parent Contracting Authority to provide its own services to the public.

The Advocate General’s opinion has invited the court to develop the concept of what is a Contracting Authority by reviewing whether VLDR may be considered to be a Contracting Authority because it is in an indirect way meeting needs in the general interest by providing goods and services to LG.

At present, the Advocate General has only given an opinion and this is not binding law. It will however, be interesting to see how the case progresses and whether subsidiaries of Contracting Authorities will need to take closer account of public procurement law in the future. For any queries regarding the Advocate General’s opinion, or public procurement in general, please visit our procurement page or contact Michael Winder on the details provided below. 


Michael Winder
T: 0151 600 3085
Email Michael

Case Law Developments

Friday 21st April 2017

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Public Procurement Law Update - April 2017

In our look at case law developments, we review the cases receiving attention since our last update in December.

Issues covered by the cases include: whether claimants who are not economic operators and did not bid for a procurement can be regarded as having sufficient interest to be able to make a claim for judicial review; consideration of whether the transfer of public services to another public body constitutes a public contract; whether a definitively excluded bidder could challenge an award decision; and an update of the Energy Solutions v Nuclear Decommissioning Authority case.

Can third party organisations bring a challenge relating to a development when they are not economic operators?

In the recent case of Wylde v Waverley Borough Council 2017 EWHC 466, the claimants sought judicial review of a decision by the Council to vary a development agreement.  The circumstances were on the face of it, apparently similar to those in the decision of R (on the application of Gottlieb) v Winchester City Council 2015 EWCH 231 (Admin) and yet the outcome was entirely different.

Read more about this case here

Does the transfer of public services to another public body constitute a public contract?

In the case of Remondis GmbH & amp Co KG Region Nord v Region of Hannover and others (Case C-51/15), the court considered whether the transfer by the Region of Hannover of waste treatment tasks, which were its responsibility, to another public body, which was a special purpose association (SPA) that had been created by local authorities for the purposes of waste management constituted a public contract, and if it was, whether it could fall outside the scope of public procurement law either by application of the ‘in-house’ (Teckal) exception or the ‘cooperation’ (Hamburg Waste) exception.

Read more about this case here.

Energy Solutions EU Limited v the Nuclear Decommissioning Authority (NDA)

The NDA has recently settled the claim brought by Energy Solutions. With the NDA facing nearly £100 million in costs and a new procurement exercise, the case continues to be a cautionary example of how not to evaluate a public procurement process.

Read more about this case here.

CJEU denies a ‘definitively excluded’ bidder the right to challenge an unfavourable award decision

In the recent case of Bietergemeinschaft Technische Gebäudebetreuung GesmbH und Caverion Österreich GmbH v Universität für Bodenkultur Wien and others (Case C355/15), the CJEU denied a ‘definitively excluded’ bidder the right to challenge an unfavourable award decision. The consortium had appealed the decision to exclude it from the tender process and had separately appealed the decision awarding the contract. The appeal against the exclusion was heard first and was unsuccessful and, subsequent to this, the appeal against the decision awarding the contract was heard. The CJEU held that as the consortium had been definitely excluded from the tender process by being unsuccessful at the first appeal, it no longer had the right to appeal against the contract award decision as it was no longer a concerned tenderer.

Read more about this case here.

If you would like to discuss any matters arising from this newsletter or if you have any queries relating to public procurement law, please either view our procurement page here or contact us directly.

Procurement Policy Notice: New CCS Guidance

Friday 21st April 2017

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Public Procurement Law Update - April 2017

New Crown Commercial Service guidance has been published regarding the transparency of suppliers and government to the public (February 2017) (PPN 01/17). The new PPN updates and replaces PPN 13/15 and applies to all central government departments, their executive agencies and non-departmental public bodies (‘in-scope organisations’).

In-scope organisations are required to explain transparency requirements to suppliers as early as possible in the procurement process and include in tender documentation, the types of information to be disclosed on contract award and thereafter. The presumption is in favour of disclosing all information except where exemptions apply and such exemptions follow the principles set out in the Freedom of Information Act. For example, the contract value should be published but the supplier rates or means of calculating the contract price could be withheld on the grounds of being commercially confidential.

The principles require in-scope organisations to pro-actively release information about contracts through the life of the contract on a regular basis and ensure publication of that information in an accessible format.

Legislation and Policy Update

Friday 21st April 2017

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Public Procurement Law Update - April 2017

The European Commission has reviewed the performance of the Remedies Directives. The Remedies Directives were brought into effect in 2009 and introduced substantial remedies for breaches of public procurement law. The Commission has concluded that:

  • The Remedies Directives have generally met their objectives of increasing the guarantees of transparency and non-discrimination, allowing effective and rapid action to be taken when there is an alleged breach of the Procurement Directives and providing economic operators with the assurance that all tenderers will be treated equally. It recognised that the Remedies Directives are effective as a deterrent to non-compliant behaviour; and
  • The objectives of the Remedies Directives are still relevant. The replies to the public consultation indicated that the most relevant provisions are the standstill period, the suspension of the contract award procedure where review proceedings are initiated and the automatic debrief to tenderers.

The European Commission has therefore concluded that the Remedies Directives will be maintained in their current form without modification.

However, the European Commission did identify certain weaknesses, which it will act upon, which are as follows:

  • Information on the use of remedies on a national basis has not been collected in a coherent manner across the EU and therefore the Commission will collect information on key indicators, which will be published under the Single Market Scoreboard to enable comparison of the efficiency of the remedies systems across Member States;
  • First instance administrative review bodies are more effective than the courts both in terms of the duration of procedures and also in standards of review. The Commission will encourage sharing of best practices from such administrative review bodies across Member States; and
  • Certain provisions are not entirely clear. In particular, the Commission will provide guidance on how the Remedies Directives and the 2014 Procurement Directives relate, as well as on the criteria to be applied to lift the automatic suspension of the conclusion of a contract following legal challenge.
In response to this review, there has been a first meeting of the EU network of first instance review bodies earlier this month to discuss ways to work more efficiently. 


New Guidance on Social, Ethical and Environmental Considerations in Public Procurement

Tuesday 13th December 2016

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Public Procurement Law Update

Newly published Crown Commercial Service (CSS) guidance encourages contracting authorities to incorporate social, ethical and environmental considerations into various stages of their procurement processes, as permitted by provisions already in place in the Public Contracts Regulations 2015 (PCR2015).

1.   Social Tenderers

The new guidance highlights that tender competitions can be reserved for certain suppliers who assist the social inclusion of disabled or disadvantaged persons. To qualify for participation in such procurements, the supplier’s workforce has to be made up of a minimum of 30% disadvantaged or disabled workers. The figure was previously higher (at 50%), so a larger pool of suppliers will now be eligible to participate.

 2.   Automatic Exclusions

The guidance clarifies that tenderers must be excluded from the procurement if they have been convicted of terrorist, child labour and/or human trafficking offences. Contracting authorities can use their discretion to exclude those tenderers which the contracting authority can demonstrate have violated social, labour or environmental conventions.

3.   Specification and Labels

The PCR2015 provides for specifications, which lay down the characteristics required of the works, services or supplies being procured. Where contracting authorities intend to purchase works, supplies or services with specific characteristics, they can also require a specific label as proof of compatibility with those characteristics. The new guidance clarifies that labels may include environmental requirements, provided the label is available in all Member States and does not unfairly discriminate against a tenderer from a particular jurisdiction.

4.   Award Criteria

The award criteria set out in the PCR2015 are a series of principles upon which detailed criteria may be built. The guidance reminds contracting authorities that contracts can be awarded on criteria other than cost price and quality. For example, whole life cost can be assessed, including production and end of life disposal, in the price award criteria. A contracting authority can also evaluate the best price-quantity ratio of tenders, which can include considerations such as the social, economic and environmental aspects (and impact) of the tender proposals, so long as such criteria relates to the subject matter of the tender.

While the ability to test such issues is welcome, it should be noted that contracting authorities must still evaluate such aspects in an objective, non-discriminatory and quantifiable way. The nature of some of these requirements can lead to difficulties in comparing tenders and devising an evaluation that does not lead to subjective marking and an inevitable challenge.

An easier way to include such requirements, which the guidance also highlights, is to include them as contractual obligations rather than pre-contract criteria. So long as they relate to the subject matter of the contract and do not make the procurement discriminatory; the inclusion of such requirements with the contract ensures the contracting authority’s needs are met whilst avoiding the difficult test of fairly and rigorously evaluating such matters.


It is in the interest of some contracting authorities to protect and encourage local business growth through the use of the procurement process. Of course, protecting or favouring one tenderer because of its local links fundamentally undermines the purpose of procurement law, which is about opening up competition. Although the new CCS guidance does not explicitly allow local tenderers to take precedence, it does allow contracting authorities to indirectly control certain characteristics of the successful tenderer. For example, if a contracting authority was to specify in its award criteria that the environmental efficiency of the manufacture and delivery of a product was of particular importance, then local tenderers would implicitly be placed at an advantage over their international counterparts due to the inevitable carbon output associated with long-distance transportation.

However, it is important to note the difficulty of ensuring tangible social, economic and environmental considerations are fairly, objectively and transparently assessed in the procurement process. Where a local benefit is required by a contracting authority (e.g. providing apprenticeships), it may be easier to simply ensure that such a requirement is included as a condition of the contract when preparing the invitation to tender. So long as such measures relate to the subject matter of the tender, they are likely to comply with the law. 

You can read more about our public procurement services by visiting our public procurement page.
If you have any queries regarding the new guidance, or public procurement law in general, please do not hesitate to contact Richard.
Partner, Commercial team
Tel: 0151 600 3302 / 0161 836 8800

Richard Hough is a  member of the Procurement Lawyers' Association