Automatic Suspension

Transcription

1 Public Procurement Seminar Automatic Suspension David Browne BL 13 March 2018

2 Introduction Alcatel Case Concept of Standstill Period Amendments in 2007 Remedies Directive 2010 Irish Remedies Regulations OCS Decision 2015 Amending Regulations Post-OCS Decisions NDA and Word Perfect

3 Remedies Directives Original Remedies Directives Damages and injunctive relief Declaration of voidness Unlawful decisions subject to effective and swift review Member States could determine detailed rules Standing (a) interest and (b) harm by infringement

4 Alcatel Decision Issue of standstill period between notification and award of contract Held that decision must be open to review procedure Contracting authority should allow intervening period to avoid rush to signature 14-day standstill period allowed in 2006 Public Sector and 2007 Utilities Regulations

5 2007 Remedies Directive Minimum period of time 14 or 16 calendar days (shorter for electronic notices) Minimum information requirements characteristics and relative advantages No standstill period for non-priority (Part B) contracts; only one candidate; call-off or draw-down contracts under framework agreements and contracts based on DPS Remedy of ineffectiveness / mandatory voidness

6 2007 Remedies Directive Reserved for serious infractions VEAT Notice avoid mandatory application of declaration of ineffectiveness Alternative penalty of up to 10 per cent of the contract value Must be effective, proportionate and dissuasive Used where contract is not declared ineffective

7 Transposition 2010 Remedies Regulations 25 March 2010 (transposition by 20 December 2009) Apply to reviewable contracts Contracting authority or entity may not conclude reviewable public contract within the standstill period Commences after day notification was sent Alternative remedy up to 10% of contract

8 Standstill Notice Must inform tenderers and candidates of the grounds of the decision Characteristics and relative advantages Enable informed decision on whether to seek review State exact standstill period Include a summary of reasons for unsuccessful applications (RPS case)

9 Inconsistency Application to review decision or for interlocutory orders within 30 calendar days after the applicant was notified or knew or ought to have known of the infringement (reg.7 of Regulations) Automatic suspension is invoked even where the application is made outside the standstill period provided for in reg.5 of Regulations Legal uncertainty between 14/16 days and 30 days

10 OCS Decisions Lifting the automatic suspension Decision of High Court (Barrett J.) Reg.8(2) conferred jurisdiction to lift suspension Court considered appropriate test for lifting the suspension Endorsed the test in reg.9(4) of Regulations Probable consequences and public interest

11 OCS Decisions Supreme Court appeal Automatic suspension kicks in when proceedings are instituted pursuant to Reg.8(1)(b) Can only be lifted by the court Reg.(8)(2)(b) referred to lifting the suspension of a procedure and interlocutory orders within the meaning of reg.8(1)(a) and not the automatic prohibition on concluding a contract

12 OCS Decisions No jurisdiction to lift suspension on concluding contract Automatic suspension would continue until the determination of a challenge to a contract award decision Incentive for unsuccessful bidders to challenge decisions Particular incentive for incumbent bidder

13 2015 Amending Regulations Regulations on 30 April 2015 Retrospective effect and apply whether proceedings were instituted before or after Regulations Permits the court to lift the suspension on the bringing of an application Re-cast of Reg.8(2) New Reg.8(2A) inserted

14 Post-OCS Decisions Question of whether American Cyanamid / Campus Oil is relevant test Tripartite test Position well-settled in England NATS v Gatwick Word Perfect v Commissioner of An Garda Síochána Campus Oil principles applied

15 Post-OCS Decisions Effect of 2015 Amending Regulations BAM PPP v NTMA Remedies Regulations went beyond Directive requirements did not require standstill period for interim decision Irish solution to Irish problem Campus Oil applied

16 Post-OCS Decisions Powerteam Electrical Services Ltd. v ESB High Court held that the court could grant an application to lift the automatic suspension at the interim or interlocutory stage Campus Oil was appropriate test - onus of proof on party seeking to maintain suspension Balance of proof favoured lifting suspension

17 Post-OCS Decisions Beckman Coulter Diagnostics Ltd v Beaumont Hospital Concluded (by way of assumption) that there was a fair issue to be tried Damages adequate remedy for applicant but not for the hospital - significant negative effect on patients Homecare Medical Supplies Unlimited Company v Health Service Executive & Anor.

18 Constitutionality of Reg.8A Beckman Coulter Diagnostics Ltd v Beaumont Hospital Reg.8A is unconstitutional under Article of the Constitution Inclusion in the Remedies Regulations of a right to lift the suspension of an awarded contract not required by the Remedies Directive Should be done by primary legislation and not SI

19 Constitutionality of Reg.8A Okunade v Minister for Justice, Equality and Law Reform Award of damages would be an adequate remedy if the applicant was ultimately successful, given the purely commercial nature of dispute Issue also raised in Homecare Medical Supplies Unlimited Company v Health Service Executive & Anor Judgment awaited in plenary action

20 Loss of Chance or Reputation Word Perfect Translation Services Limited v the Minister for Public Expenditure and Reform Noonan J. endorsed BAM and Powerteam and did not accept that reputational damage arises from loss of contract Standard hazard for commercial entities You win some, you lose some

21 Damages as Adequate Remedy Court of Appeal decision in Word Perfect (Hogan J.) Spijker decision of ECJ UK Supreme Court decision in NDA Francovich criteria Entitlement to damages is highly conditional and limited Must be direct causal link between breach and loss

22 Damages as Adequate Remedy Breach must be sufficiently serious Must show that breach of Directive is grave or manifest or inexcusable Concluded that damages would not be adequate remedy Appeal allowed on application to lift suspension Expedited trial

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