What do you know about procurement regulations and time barred challenges? The case of Nationwide Gritting Services Limited (NGS) against the Scottish Ministers sheds some light on the challenge timescales under procurement regulations, but unfortunately does little to provide comfort to contracting authorities embarking on procurement exercises.
The 2006 regulations outlined that court proceedings for a breach of those regulations must be brought within 3 months from the date when grounds for bringing proceedings first arose. Under the new 2012 regulations, this is now 30 days.
In April 2012 NGS heard that Transport Scotland had purchased and was storing supplies of de-icing salt.
- On 30 April 2012 NGS formally requested information from Transport Scotland on the procurement procedure that was followed.
- On 30 May Transport Scotland advised that that it's trunk road operating companies normally deal with this, but it had obtained quantities of salt in 2010 and 2011, and given the urgency of the situation (due to the extreme weather) a derogation from the regulations was allowed.
- NGS raised an action for a breach of the regulations due to the failure to advertise the contract.
- NGS raised an action on 28 August 2012.
The Scottish Ministers argued that NGS had the basic facts before the relevant date (28 May 2012), and the claim was now time barred.
The court considered "what degree of knowledge NGS possessed prior to 28 May 2012?" and found:
- No business relationship existed between NGS and Transport Scotland, they did not tell NGS that they had obtained supplies from elsewhere and sourcing salt would not normally fall within Transport Scotland's remit;
- The acquisition could have been done via an existing contract, there was no reason for NGS to assume a breach of the regulations;
- The regulations envisage transparency and Transport Scotland failed to publish a contract notice. If Transport Scotland had published a notice, NGS would have had the requisite knowledge to raise proceedings.
- It was only when NGS received Transport Scotland's response on 30 May 2012 that their suspicions became hard knowledge. As such, the Scottish Ministers claim that the action was time-barred was rejected by the court.
This is a very narrow construction of the meaning of the date when 'grounds for bringing proceedings first arose' and may leave many contracting authorities vulnerable to a challenge even after they believe the timescale has expired. If you are embarking on a procurement process, and would like further advice please contact us.