This is the fifth in our series of cross-sector articles considering the impact of the Procurement Act 2023 (the Procurement Act), which came into force on 24 February 2025 and introduces changes to how public procurements are awarded, managed and investigated. This article reviews the basis for challenging a contract awarded under the Procurement Act.
What has changed?
Remedies
Array of remedies: under the Procurement Act, the array of remedies available to a supplier remains similar to those under the prior Public Contracts Regulations 2015 (PCR). These remedies include:
- court orders to overturn decisions before a contract is awarded
- claims for damages
- the "set aside" remedy (replacing the terminology of "ineffectiveness") in certain circumstances where a contract has already been entered into.
Redress can be sought pre- or post-contract award.
Pre-contractual remedies include:
- the automatic suspension of the award (where the challenge is made during the standstill period)
- the setting aside of the contracting authority's decision
- mandating specific actions by the contracting authority
Post-contractual remedies include:
- setting aside the contract
- reducing the contract term or the scope of goods/services
Test for interim remedies: the Procurement Act provides a codified, procurement-specific test that the courts must have regard to when considering whether to award a supplier an interim remedy (such as whether to lift an automatic suspension), rather than applying the long-established American Cyanamid test. The court must therefore consider:
- the public interest in: (a) upholding the principle that public contracts should be awarded, and contracts should be modified, in accordance with the law, and (b) avoiding delay in the supply of the goods, services or works provided for in the contract or modification
- the interests of suppliers, including whether damages are an adequate remedy for the claimant
- any other matters that the court considers appropriate.
It is a position that will be watched very closely as to whether these changes will enhance claimants' ability to maintain automatic suspensions, but it should be noted that the Procurement Act merely requires the court to consider these factors and does not provide primacy to any. It is therefore ultimately a matter of the court's discretion in considering the final bullet point above, and therefore the existing case law and treatment of the test will likely remain of significant importance, in particular the court's tendency to lift automatic suspensions at an early interim stage in practice.
Moreover, as per claims under the PCR, where the court applies the above test and permits the claimant to maintain a suspension, the claimant will almost certainly have to provide a cross-undertaking if the suspension is later found to be unwarranted, which always represents a significant potential liability. The contracting authority will likely raise the same sort of arguments they always will have done: suspending the contract award will cause significant damages, such as project delays, interim arrangements and re-tendering costs. Therefore, it remains highly likely that the court will impose a cross-undertaking requiring the claimant to indemnify the contracting authority for losses incurred as a result of the continued suspension if the court eventually deems it unjustified. This therefore remains a pivotal factor for any claimant weighing whether to press for the original contract award or to pursue damages.
Limitation and standstill
Limitation: the limitation period is also unchanged from the PCR, meaning suppliers will generally have 30 days from the point at which they knew (or ought to have known) about the circumstances giving rise to the claim. However, where a supplier wishes to set aside a contract where a contracting authority did not publish a notice of contract details, proceedings must be commenced before the earlier of the end of the 30-day period and the end of the period of six months beginning with the day the contract was entered into or modified.
Standstill period and automatic suspension: under the prior regime, a contracting authority was required to wait 10 days after the issue of a 'standstill letter' sent by the contracting authority to all tendering suppliers before contracting with its preferred supplier. Any claims issued prior to the contract being made would invoke an automatic suspension of the process, even if this exceeded the 10-day period. However, the Procurement Act limits this standstill period to eight working days from the publication of the Contract Award Notice; claimants can no longer benefit from automatic suspension until the date the contract is concluded.
More decisions, more claims?
The UK Government has sought to advance its vision of "a more open and transparent procurement regime" as per its guidance – which may in turn equip unsuccessful bidders with a wealth of publicly available information that may be used to challenge decisions. Arguably, contracting authorities are also having to make more decisions which therefore means more potential challenges: these are explored below.
Assessment summaries: under the Procurement Act, contracting authorities must generally publish a Contract Award Notice on a central digital platform. In addition, where a competitive tender process was carried out, contracting authorities must provide an 'assessment summary' to every supplier that has submitted an assessed tender. The information that contracting authorities must provide to tenderers has changed, as implemented by the Procurement Regulations 2024. In summary, contracting authorities must provide: (i) the scores for each award criterion, (ii) an explanation of the scores, (iii) for unsuccessful suppliers, an explanation of the reasons that the contract was not awarded in addition to providing details (i) and (ii) for the winning or 'most advantageous' tender. These will inevitably be scrutinised in significant detail by unsuccessful tenderers.
Contract management: as considered in our separate article, the Procurement Act introduces a range of reporting and monitoring requirements of the ongoing performance of the awarded contract, including the publication of Key Performance Indicators.
Investigations and debarment: as considered in our separate article, the Procurement Act provides new powers awarded to public bodies for investigations and debarment, including the introduction of a new 'Debarment List' of excluded or excludable suppliers.
What does this mean for suppliers?
It remains the case that if a supplier wishes to challenge the outcome of a procurement, then it is essential that advice is sought at the earliest opportunity, and ideally before the time the clock starts ticking. What has changed is the increase in areas of potential challenge: there are more notices, more assessments and more transparency required on an ongoing basis of the assessment of contract performance, and not just the award of the contracts initially.
Suppliers must also beware the shorter period to benefit from automatic suspension, being eight working days from the Contract Award Notice rather than the time the contract is made.
Our public procurement article series also explores other considerations in more detail. Please contact Katie Chandler, Matt Evans or a member of our team if you want to discuss this or any other issue.
