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Time for clarity on limitation periods in procurement proceedings? Newbridge Tyre and Battery Co Ltd v Commissioner of An Garda Síochána


Monday, August 20, 2018

A recent Irish High Court decision of 21 June 2018 (Newbridge Tyre and Battery Co Ltd v Commissioner of An Garda Síochána ([2018] IEHC 365) sheds new light on the point at which the 30 day time limit begins for aggrieved tenderers to lodge a challenge to a tender process under the European Communities (Public Authorities’ Contracts) (Review Procedures) (Amendment) Regulations 2017 (the “Remedies Regulations”).

Background
On 27 October 2017, An Garda Síochána (“AGS”) informed Newbridge Tyre and Battery Co. Ltd (“Newbridge”) that their tender for towing and garaging services for seized and recovered vehicles was unsuccessful. Newbridge raised questions about the ability of the preferred tenderer (Corcoran Autobody Works Ltd (“Corcoran”)) to comply with the requirements of the Request for Tenders (“RFT”). Over the course of a month AGS and Newbridge engaged in correspondence, summarised below.

Newbridge alleged the following errors in AGS’ decision to appoint Corcoran as the preferred tenderer:

  • Corcoran’s waste permit for its primary waste facility was insufficient as it was time limited (rather than operational on a 24/7 basis); and
  • Corcoran’s secondary waste facility was only capable of hosting a limited number of vehicles.

Newbridge argued that due to the above, Corcoran had not met the requirements of the RFT and AGS had therefore committed an error by awarding the tender to Corcoran. AGS acknowledged the restrictions on Corcoran’s relevant permits but stated that these would be corrected prior to commencement of the contract (in line with its RFT) and therefore it had not erred in awarding the tender to Corcoran.

AGS informed Newbridge on 30 November 2017 that the “standstill period” had expired, and then informed Newbridge on 6 December 2017 that the 30 day calendar time limit contained in the Remedies Regulations had “clearly expired”. Newbridge subsequently applied for leave to bring judicial review proceedings on 8 December 2017.

When does the 30 day time period commence?
In her judgment Baker J examined the key question posed by the “apparent flexibility” in Regulation 7 of the Remedies Regulations, namely when the time limit commences. Baker J held the test was to ascertain the point at which an unsuccessful bidder might reasonably take the view that the preferred bidder had not met the qualification criteria. Correspondence alone between Newbridge and AGS did not stop the clock running: the key issue is “whether the enquiries were matters of substance… reasonably necessary to enable the applicant” to assess the validity of the contract award. In doing so, Baker J quoted favourably from Baxter Healthcare Ltd. v. Health Services Executive [2013] IEHC 413 and Gaswise Ltd. v. Dublin City Council [2014] IEHC 56.

Baker J then applied this test and held that the letter from AGS (via the Chief State Solicitor’s Office) to Newbridge of 23 November 2017 was the point at which time began to run. At this stage, AGS was aware of the alleged issues surrounding Corcoran’s tender but rejected Newbridge’s allegations. Newbridge, on the other hand, viewed the approach from AGS as incorrect at law and consequently (after two letters of clarification) Newbridge had sufficient information to be in a position to reasonably assess whether it was appropriate to bring proceedings.

Baker J rejected the contention that Newbridge was “seeking to ascertain the strength of the case before taking the risk” of litigation, since the relevant facts were not “reasonably ascertainable” prior to correspondence and that “litigation chaos…[is] not desirable in the interests of the proper administration of justice.”

Comment
It is particularly notable that the widely reported High Court case of RPS Consulting Engineers Limited v Kildare County Council [2016] IEHC 113 (“RPS”) is not referred to within Baker J’s judgment. In that case, Humphreys J stated that “the 30-day limitation period runs from the date of notification, not from the date of any subsequent dialogue or provision of information to a tenderer.” It remains to be seen how the Irish courts will reconcile this difference in approach to the 30 day limitation period.

Neither RPS nor Newbridge Tyre and Battery Co Ltd adequately tackle the issue of the commencement of the standstill period where the initial standstill letter is defective (i.e. the letter fails to provide the characteristics and relative advantages of the successful tenderer). If the RPS approach is correct (the date of notification starts the 30 day limitation period), the standstill period begins to run from the day after the standstill letter was issued, and with it the disgruntled tenderer’s option to prevent the contracting authority from entering the contract may disappear even if it has not received sufficient information to reasonably assess their position.

There are three key points to take away in light of Newbridge Tyre and Battery Co Ltd:

  • Contracting authorities should not rely upon the date of issue of the standstill letter as the commencement of the 30 day time period for the purposes of Regulation 7(2) of the Remedies Regulations;
  • Unsuccessful tenderers should note this slightly more relaxed approach to timelines for challenges to tender procedures (in comparison to RPS), but unless it receives an undertaking from the contracting authority not to enter into the contract, the effectiveness of its potential remedies will be substantially reduced (i.e. it will most likely only receive damages rather than a re-run of the tender procedure); and
  • The standstill letter will take on even greater importance for contracting authorities – they will have to walk the tightrope of providing enough information to trigger the Regulation 7(2) time limit, while acknowledging the risk entailed in providing such information to unsuccessful tenderers that may challenge before the expiry of the standstill period.

(1) The period between the contract award letter and the date that the contracting authority enters the contract. Under the Remedies Regulations, this period is a minimum of 14 calendar days commencing the day after the contracting authority sends the contract award letter.

If you have any questions on this topic, please contact Kerri Crossen.


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