Procurement Challenges - When Is The Requirement To Give A Contracting Authority Prior Notice Of Proceedings Satisfied?

There has been a steady stream of decisions emanating from the Court of Session on procurement challenges in the last couple of years, one of which was the application by the Scottish Ministers to have the automatic suspension of the award of the contract for the Northern Isles ferry service lifted1. Following the successful lifting of the automatic suspension, the Scottish Ministers proceeded to award the contract to the successful bidder (Serco) and the aggrieved bidder (Shetland Line) is proceeding with an action for damages. The most recent instalment of this case has provided an interesting perspective on the requirement of an aggrieved bidder to give prior notice to a contracting authority of its intention to bring proceedings.

The Regulations

The Public Contracts (Scotland) Regulations place a requirement on an economic operator to provide notice to a contracting authority prior to bringing proceedings. The second judgment in the Shetland Line case2 provides some guidance as to when the notice requirement will be considered to have been met. At the time of the procurement, the previous Public Contracts (Scotland) Regulations 2006 were in force although the principles of the case could equally apply in terms of contracts procured under the current Regulations. At the time of the procurement Regulation 47(6)(a) (ii) was worded:

"47(6) Proceedings under this Part shall not be brought unless:

(a) the economic operator bringing the proceedings has informed the contracting authority..of

(i) the breach or apprehended breach of the duty owed to it in accordance with paragraph (1) or (2); and

(ii) its intention to bring proceedings under this part in respect of that breach or apprehended breach".

The Timeline

On Friday 4 May 2012, the Scottish Ministers issued their contract award decision and informed Shetland Line (the incumbent provider) that their tender to operate the Northern isles ferry service had been unsuccessful. The letter indicated that the standstill period would run from 5 May until 14 May inclusive. Shetland Line responded by email on Friday 4 May stating that it was "deeply disappointed and exceedingly frustrated" at the outcome of the procurement process.

Monday 7 May was a bank holiday. On Tuesday 8 May, Shetland Line instructed their solicitors and on Wednesday 9 May they instructed counsel, held a telephone conference call and instructed counsel to draft a summons, if he thought it was appropriate. On Friday 11 May...