This note is by its nature a summary only, and is not legal advice.

Procurement law remedies –ineffectiveness

For procurements commenced on or after 20 December2009, a contract awarded without an advert, in breach ofthe procurement regulations, may be declared ineffective.This note summarises other situations where the threat ofineffectiveness should form part of decision making.

Issue Comment

Introduction Sometime a judgement call is required as to whether theprocurement rules require an OJEU advert and competition.In this situation an authority may in good faith and on balancedecide that an advert is not required. If that decision isincorrect, there is the potential for ineffectiveness.

Scope ofprocurement

If the scope evolves, it may be outwith the scope of theoriginal advert, and so treated as a direct award.

Land deals Pure land deals are outwith the scope of procurement law, butthere is a spectrum of application from a pure land deal towhat amounts to a works contract with a land element.

The "Teckal" in-house exemption

An authority does not need to compete a contract awarded toan "in-house" body, for example a company owned andcontrolled by a local authority. The tests for this exemptionbeing met are by no means black and white.

Changes tocontractors or sub-contractors

Like contract variations, the courts may find that significantchanges to consortium members require a new competition.This is a developing area of procurement law.

Use of thenegotiatedprocedure without anotice

In some circumstances an authority is permitted to make adirect award e.g. extreme urgency. As with the otherexamples, there are judgements to be made.

Part B services Part B services do not require an OJEU advert. In somecircumstances the classification of a service can be difficult.

Thresholds With contract values on the margins of the thresholds, thesafest course was always to follow the OJEU route. The riskof ineffectiveness as a consequence of getting valuationwrong increases the importance of the decision.

Contract Variation If a contract is materially changed after award, a newprocurement may be required. In a challenge situation, thecourts may treat the amended contract as a new and directlyawarded contract.