We all know that a good, wide-ranging framework contract coupled with a supportive relationship with a willing Public Sector client can lead to contract opportunities that may be well beyond the scope of the original framework contract. However, after a recent court decision, that freedom may well be about to be curtailed.
On 1 December 2015, a UK court used its statutory power to void a public contract that had not been concluded in accordance with the public procurement rules. This is the first time that a UK court has taken such action and although the judgement will probably be appealed, it signals a shift in the way Public Sector framework bids may have to be handled in the future.
In this case, Amey held a Crown Commercial Service framework contract through a limited company within its group. In another part of the group, it part-owned a separate company in partnership with North Lanarkshire Council. In response to a framework Invitation to Tender, this partnership bid for a street lighting contract by Inverclyde Council and was awarded the contract. The other bidder challenged the decision on the basis that this company was not a party to the framework contract and therefore, that the contract had been directly awarded without proper competition.
The judge agreed with the challenge. He found that the defendant had broken the Framework Agreement conditions as technically, this was a new public contract which could only be awarded in accordance with a prior advertisement and competitive tender under the procurement rules. As no such steps had been taken, he declared the contract ineffective.
What this means for framework bids
We cannot say why Amey took such a risk with its bid when there would seem to have been some ways in which this situation could have been avoided, e.g. running the contract through the company on the framework. However, we think that because of this action, the scope of framework awards will come under increased scrutiny in the future. As a result, framework suppliers will have to carefully consider their strategy for framework competitions whenever opportunities arise that are not clearly in the centre of the original framework scope.
Author: Andy Haigh PPM APMP Director and Public Sector Bid Consultant, Sixfold International Ltd
If you would like to discuss the strategy for your next framework bid submission, or if you think you have grounds to challenge a framework award please contact the team on 020 8158 3952 / firstname.lastname@example.org
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