PROCUREMENT

Tendering for Public Contracts in 2016

As a regional leader in commercial dispute resolution ranked in Chambers and the Legal 500, Millar McCall Wylie (MMW) are naturally very familiar with the intricacies of public procurement law as it relates to this jurisdiction.

Millar McCall Wylie has particular experience in helping clients prepare and submit challenges to procurement processes in the High Court in Belfast. Much of this experience comes in the form of advising business clients who have been treated unfairly or who have been unlawfully excluded from public procurement processes with Contracting Authorities.

Despite this, as Caroline Prunty, Partner at Millar McCall Wylie observes “We are increasingly finding that we are being called upon to provide a consultative advisory role in relation to complex bidding arrangements.” Indeed, given the volatile nature of many tender processes, tenderers often require timely and strategic advice about how best to approach bids. Moreover, although new EU procurement rules have been adopted to simplify tendering processes, Millar McCall Wylie suspects that an increasing number of SMEs involved in tendering for public contracts could create even more disputes.

In public sector tendering, larger contracts are being more commonly divided into lots to facilitate smaller companies in expenditure of public funds. As a result, public contracts are increasingly allowing for bids to be made for contracts by multiple companies or consortiums. Businesses involved in tendering for public contracts will be well aware that under the new Public Contracts Regulations 2015, Contracting Authorities continue to be obliged to act in a manner that promotes equality, transparency, proportionality, fairness and value for money. However, if you are invited to tender in a consortium or with a group of companies, the process can be extremely complex. It often requires advice from commercial lawyers who also understand the interconnectedness of procurement law. Issues can also arise between the establishment of a consortium and a bid. Main contractors can end up in substantial disagreement with subcontractors or consortium partners during these delicate negotiating phases. In such circumstances, a consortium partner may well decide that it would be better off if it removed itself from the arrangement.

In 2010, the European Court of Justice held in Wall v City of Frankfurt that where a sub contractor was critically important to a main contractor’s bid, to replace them would be a material change to the contract. According to the court, what must happen in this situation is that the replacement sub contractor must be better or equal. Other issues arise where main contractors are seen to be having carte-blanche in their choice of subcontractors. Some contracts also allow for successful tenderers to choose their sub contractors after an award has been given. What does 2016 hold in store. Moving into 2016, tendering for public sector contracts will remain a complicated business. There are numerous commercial and legal considerations which warrant professional advice. As a member of Multilaw, an elite global network of lawyers, Millar McCall Wylie is part of a multijurisdictional procurement practice group which provides a wealth of knowledge in the area of procurement.

If you are involved in tendering for public contracts and require advice please do not hesitate to contact MMW’s Caroline Prunty on Caroline.Prunty@mmwlegal.com

 

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