Setting Aside for Breach of Public Procurement Rules

The Court of Appeal in Northern Ireland, in the case of Henry Brothers (Magherafelt) Ltd & Ors v Department of Education for Northern Ireland [2011] NICA 59, decided that the High Court was correct in setting aside a framework agreement entered into by the Department of Education for Northern Ireland following breaches of the public procurement rules.

The Facts

The appellant Government department commenced a competition under the restricted procedure in Regulation 12 of the Public Contract Regulations 2006 ("the 2006 Regulations") for contractors to be placed on a framework agreement for the Northern Ireland Schools Modernisation Programme (the primary competition stage) whereby they could then tender for individual works contracts (the secondary competition stage).

Following their failure to be placed on the framework agreement the respondents, a consortium of building contractors, commenced proceedings under the 2006 Regulations claiming breach of statutory duty, breach of obligations under the EC Treaty and breach of contract.

The High Court found for the building contractors on the issue of liability and ordered that the framework agreement be set aside as the remedy for the breach. The Government department appealed against those decisions on the grounds that the judge erred in finding (1) that price was a mandatory criterion in the selection process for the most economically advantageous tender, (2) that the building contractors' claim was not statute barred and (3) that the judge had the power to set aside the framework agreement.

The Issues

Was the High Court correct in deciding:

that the Government department had made a manifest error in the pricing mechanism used to assess tenders; that the claim was not time barred; and that the framework agreements could be set aside as a remedy for breach of the procurement rules. The Decision

The Court of Appeal held that the High Court was correct in finding that the Government department had made a manifest error in the pricing mechanism used to assess tenders and that the claim had not been time barred.

The Court of Appeal also held that the High Court was correct in deciding that the framework agreement could be set aside as a remedy for breach of the procurement rules. In reaching that decision, the Court of Appeal held that a framework agreement was not a contract for the purposes of regulation 47(9) of the 2006 Regulations.

Comment

This decision confirms that Government departments must...