Brookhouse Group Ltd-v-Lancashire CC
Citation: [2024] EWCA Civ 717
The 30-day time limit under the Public Contracts Regulations 2015 Pt 3 (6) reg.93(5) for seeking a declaration of ineffectiveness under reg.99, running from an interested economic operator being given the “relevant reasons” it had been unsuccessful, did not apply where the declaration was sought on the ground that no contract notice had been published despite one having been required. In such a case, the limitation period was six months from the contract being entered into, unless the contracting authority issued a contract award notice, in which case the period was 30 days from when the contract was published.
A local authority appealed against the refusal of its application to strike out proceedings brought against it under the Public Contracts Regulations 2015 by the respondent (B).
The Court of Appeal, dismissing the appeal, held:
The claim had been brought under the first ground for a declaration of ineffectiveness set out in reg.99, because there had been no prior publication of a contract notice. The second ground could never have applied because that only arose where there had been a competition and the contracting authority had then awarded the contract before it had been entitled to. The two grounds were directly reflected in reg.93. Regulation 93(3) and reg.93(4) were concerned specifically with the first ground. If there was no contract notice, an economic operator had six months to challenge the contract, but the contracting authority could reduce that to 30 days if it issued a contract award notice under reg.93(3), thereby notifying any interested economic operator that the contract had been awarded to someone else. The 30 days started from the day after the date on which the contract was published. Where there had been a competition and the second ground applied, the contracting authority could again reduce the six-month long-stop period by complying with reg.93(5) and reg.93(6), informing the economic operator about the conclusion of the contract and providing a summary of the relevant reasons. The 30 days started on the day after the date on which the economic operator was informed of the conclusion or, if later, was informed of a summary of the relevant reasons (see paras 37-39 of judgment).
The local authority’s reasons argument entirely ignored the proper construction of reg.93 read in conjunction with reg.99. Since there had been no competition, the second ground for a declaration of ineffectiveness could not arise. Only the first ground had been applicable. In those circumstances, the local authority could have reduced the long-stop period of six months to 30 days, but only if it had published a contract award notice. Since it had chosen not to do so, the six-month period was not reduced. Regulation 93(5) was irrelevant, because it presupposed that there had been a competition and related to the second ground (para.41).
The local authority’s decision not to issue a contract award notice had been a flagrant breach of its obligations under the Regulations in respect of transparency, fairness, and the requirement to treat each economic operator equally. Although B was told that the development agreement had been concluded, it did not appear that any other economic operators had been informed. In those circumstances, it would be wholly wrong to construe reg.93(5) and reg.93(6) in a way which would allow the local authority to avoid its obligations to all relevant economic operators, and particularly to do so by ignoring the fact that reg.55(2) presupposed that there had been a public competition in the first place (para.43).
Although reg.93(6) referred to the reasons which the economic operator “would have been entitled to receive”, that did not envisage the provision of reasons to a hypothetical economic operator who had never been involved in any competition. Regulation 55(2) set out the reasons which a contracting authority would provide to an unsuccessful candidate or tenderer “on request from the candidate or tenderer concerned”: that information would not ordinarily be provided by the contracting authority unless it was requested. Regulation 93(5) therefore put the onus on the contracting authority to provide that information voluntarily, even if it had not been requested. The reasons the economic operator “would have been entitled to receive” under reg.93(6) were the reasons to which it would have been entitled had it made a request. There was therefore no question of reg.93(6) extending to a hypothetical economic operator (para.44). The information in reg.55(2) was the information the unsuccessful candidate or tenderer would require in order to know why it had been rejected. Nothing in reg.55 required the provision of reasons explaining why there had been no public competition in the first place (para.45).
B had not been a “candidate” entitled to the reasons identified under reg.55(2)(a). Regulation 55(1) made clear that it concerned the provision of information to an “unsuccessful” candidate or tenderer. In the absence of a competition, it could not be said that B had been “unsuccessful”. The local authority argued that B had been a “would-be candidate”, in the sense that it would have been a candidate if there had been a call for competition. However, a “would-be candidate” was not a creature known to the Regulations (paras 50-54).
Link to judgment on BAILI: Lancashire County Council v Brookhouse Group Ltd [2024] EWCA Civ 717 (28 June 2024)
