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The defendant local authority (LCC) awarded a contract to a developer (MGD), which was entered into in July 2022. The contract was a public works contract or mixed public works and services contract under the Public Contract Regulations 2015 (SI 2015/102) (PCR 2015) for land redevelopment. The claimant (B) had in 2019 unsuccessfully attempted to contract with LCC for the development of the same site.

LCC considered that the contract was under a competitively tendered contract awarded to EWG, MGD's parent company, in 2012, and within a strategic partnership agreement (SPA) constituting a "framework contract". LCC considered that this allowed specific development agreements with EWG or MGD without further competitive tendering.

LCC informed B about the MGD contract in August 2022. B sent a letter before claim on 8 September 2022. LCC's reply, on 22 September 2022, explained why it could enter the MGD contract under the SPA and without undertaking a competitive tender process.

B issued proceedings in January 2023 for a declaration of ineffectiveness under regulation 98(2) of the PCR 2015.

LCC raised a limitation defence, on the basis that B received a summary of the relevant reasons by 22 September 2022 under regulation 93(5), and that the 30-day time limit for starting proceedings under regulation 93(2) expired on 24 October 2022.

The High Court struck out LCC's limitation defence and rejected its applications for strike out and summary judgment of B's claim. It held that:

• Citing Alstom Transport v Eurostar International Ltd and another [2011] EWHC 1828, regulation 93(5) applied where a competition was carried out, and reasons for rejection were provided to unsuccessful tenderers. • LCC accepted that the MGD contract was a public works contract, not a framework agreement. The PCR 2015 did not recognise a "framework contract". • The 30-day time limit did not apply because challengers were not put on notice by a contracting authority. Applying the six-month time limit under regulation 93(2)(b) was not illogical, nor contrary to the "unambiguous and certain" language of regulation 93.

Because B was not a candidate or tenderer, and the PCR 2015 did not recognise "would-be candidates", relevant reasons had not been provided under regulation 55. Regulation 93(5) could not, therefore, apply. LCC's reply to B's letter before claim was not a summary of relevant reasons in this sense, and did not contain the information specified in regulation 55(2).

Source: Practical Law

Date: 26 November

Posted in News on Nov 26, 2023

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