Court extends time to bring a procurement claim

7th August 2018

In a recent judgment, Mr Justice Stuart-Smith found good reason to extend the time limit to enable the claimant, Amey Highways Ltd, to bring its claim outside the 30-day limitation period.

The procurement was governed by the Public Contract Regulations 2015. The defendant, West Sussex County Council, had decided to award a highways contract to Ringway Infrastructure Services Ltd, which bettered the claimant’s score by just 0.03 marks. The claimant argued that its score should have been higher than the winning bidder’s and thus that it should have been awarded the contract.

There were two elements to the claimant’s claim. One was a dispute over the inclusion of resource costs and how the Council instructed that these should be presented in the bid (Instruction Claim), and the second was an allegation based on manifest error, which was not considered in this ruling. The Instruction Claim itself had two parts, each arising from instructions given on different dates by the Council regarding the method of accounting for these resources in the bid.

In pre-action correspondence between Amey and the Council, the Council had agreed not to argue that the limitation period for bringing a claim had expired between certain dates. Under the Public Contracts Regulations 2015 (regulation 92(2)), the main limitation period of 30 days commences when the claimant “first knew or ought to have known that grounds for starting the proceedings had arisen” (commencement date).

  • The commencement date for one part of the Instruction Claim was agreed between the parties and limitation was acknowledged to have expired for that part of the claim before the agreement with the Council not to take a point on limitation came into force.
  • In relation to the second part of the claim, the commencement date was disputed, as the claimant said that the Council’s intention was not clear in its first instruction and was clarified in a later instruction. The Court relied on ambiguity in the Council’s clarifications to say that the claimant could not have known about the claim until the later date for which it contended. This was within the period during which the parties’ limitation agreement covered and so was not time-barred.

The court decided that there was no prejudice in extending time for the first part of the claim (even though the 30 days had admittedly run out before the agreement on limitation) because the issues were closely linked to the second part and allowing the first part in would not have delayed the procurement process by any more than it already had been delayed.

The court gave effect to an agreement between the parties not to take a limitation point and said that to go behind such an agreement would be “unconscionable”.

The following key points also arise from the judgment:

  • The degree of knowledge or constructive knowledge that is required to start time running is “knowledge of the facts which apparently clearly indicate, though they may not absolutely prove, an infringement”: see SITA v GMWDA [2011] 2 CMLR 32. The Court in this case construed ambiguity in the Council’s clarifications against the Council, so as to conclude that the claimant’s knowledge of the infringement started running on the later date (within the limitation period). Therefore, it is critical when drafting clarifications that authorities must make sure it is absolutely clear (a) what technical/financial detail is being asked for and (b) what sanction or consequences (exclusion, adverse scoring or adjustment of scores) will be applied if the clarification is not complied with.
  • While the court will be strict on applying the limitation periods, the key public policy consideration is delay to the public procurement process. If extending time for a claim would not cause a delay (for example, because other claims have already delayed the process), the court will be open to extending time, particularly if the issues are closely linked. In particular, the court in this case was hostile to “salami-slicing” elements of claims, calling this “sterile and potentially unjust”. So if there are closely-linked claims, where some elements are within limitation and others not, it is likely to be difficult to persuade a court not to extend limitation for all parts of the claim.
  • Agreements not to take a point on limitation within a set period are enforceable.

Following receipt of the judgment, we understand that the Council has now taken the decision not to proceed with the existing procurement process to ensure that the risk of legal challenge can be mitigated and will re-procure the highways contract.

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