Getting The Deal Through: Public Procurement 2011 - Ireland Chapter, September 2011

LEGISLATIVE FRAMEWORK

1 What is the relevant legislation and who enforces it?

In the Republic of Ireland (excluding Northern Ireland, which is part of the United Kingdom) EU public procurement law is transposed into national law by a series of regulations (statutory instruments) promulgated by the minister for finance pursuant to the European Communities Act 1972, as amended, authorising a minister of the government to enact such regulations in order to give effect to an obligation of EU law. The 2004 Directives (Directive 2004/18/EC, coordinating the procurement procedures for the award of public works contracts, public supply contracts and public service contracts, (the Classic or Public Sector Directive) and Directive 2004/17/EC coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors (the Utilities Directive)) have been transposed into national law by the European Communities (Award of Public Authorities' Contracts) Regulations 2006 (SI No. 329 of 2006) and by the European Communities (Award of Contracts by Utility Undertakings) Regulations 2007 (SI No. 50 of 2007), respectively.

The EC Remedies Directives (Directive 89/665/EEC on the coordination of the laws, regulations and administrative provisions relating to the application of review procedures to the award of public supply and works contracts, and Directive 92/13/EEC coordinating the laws, regulations and administrative provisions relating to the application of Community Rules on the procurement procedures of entities operating in the water, energy, transport and telecommunications sectors) were transposed respectively by the European Communities (Review Procedures for the Award of Public Supply, Public Works and Public Services Contracts) (No. 2), Regulations 1994 (SI No. 309 of 1994) and the European Communities (Review Procedures for the Award of Contracts by Entities operating in the Water, Energy, Transport and Telecommunications Sectors) Regulations 1993 (SI No. 104 of 1993), each as amended.

Directive 2007/66/EC of 11 December 2007, amending Directives 89/665/EEC and 92/13/EEC with regard to improving the effectiveness of review procedures concerning the award of public contracts, has been transposed into national law in Ireland by the European Communities (Public Authorities' Contracts) (Review Procedures) Regulations 2010 (SI No. 130 of 2010) and by the European Communities (Award of Contracts by Utility Undertakings) (Review Procedures) Regulations 2010 (SI No. 131 of 2010), each made on 25 March 2010. The deadline for transposition was 20 December 2009.

In general, enforcement is by action in the courts pursuant to the Regulations transposing the Remedies Directives and pursuant to Order 84A of the Rules of the Superior Courts (introduced pursuant to the Rules of the Superior Courts (No. 4) (Review of the Award of Public Contracts) 1998 (SI No. 374 of 1998) and now replaced by a new Order 84A since September 2010 which provides a judicial review procedure in respect of the Remedies Directives governing the Public Sector Directive as well as the Utilities Directive.

Public bodies are also subject to administrative supervision under various guidelines, circulars and codes of practice, but these are not ordinarily justiciable in themselves.

As a general principle, the ordinary recourse for an aggrieved party is to a judicial review action pursuant to the Remedies Directives as implemented. There is also the possibility of filing administrative complaints with various Irish authorities or with the European Commission – ordinarily outside Irish law – although such a complaint could have the effect of prompting European Commission enforcement proceedings against Ireland.

2 In which respect does the relevant legislation supplement the EU procurement directives or the GPA?

The 2006 (Public Sector) and 2007 (Utilities) Regulations effect transposition of the Public Sector and Utilities Directives in a very detailed manner and, in general, do not seek to deal in detail with matters beyond the scope of those Directives.

Importantly, the general principles of EU law are applicable in all cases in Ireland even where the Public Procurement Directives would not specifically apply. Thus, it would ordinarily be illegal under Irish law to discriminate in any public procurement matter on the basis of nationality as between enterprises from member states of the European Union. See, for example, the well-known decision in case C45/89 Commission v Ireland [1988] ECR 4929 (the 'Dundalk Waterworks' case), a standards case decided in a public procurement context. See Case C-226/09 Commission v Ireland, 18 November 2010, on applying general EU Law principles to Part B (non-priority) service contracts and Release Therapy Ltd v Health Service Executive [2001] IEHC 57 applying the same principles at Irish national level. Furthermore, the general principles of EU law (such as that exemplified in the decision of the European Court of Justice in Case C324/98 Telaustria) would apply in Ireland and would ordinarily be enforced by the courts.

3 Are there proposals to change the legislation?

Regulations to transpose Directive 2007/66/EC (in relation to remedies) were due to have been promulgated on 20 December 2009, the deadline for transposition. They were, in fact, transposed by the European Communities (Public Authorities' Contracts) (Review Procedures) Regulations 2010, and by the European Communities (Award of Contracts by Utility Undertakings) (Review Procedures) Regulations 2010, each made on 25 March 2010.

The 2010 Regulations also effected change in light of the judgments of the Court of Justice, both on 28 January 2010, in case C- 456/08 Commission v Ireland and case C-406/08 Uniplex (UK) Ltd v NHS Business Services Authority on the time in which actions for review of procurement procedures may be commenced. Order 84A was replaced with amendments to reflect the 2010 Regulations.

4 Has the legislation recently been amended or has its application in practice been adjusted in response to the global economic and financial crisis? If so, are the amendments or adjustments limited in time?

It had not been amended since the enactment of the Regulations in 2006 and 2007 recounted in question 1 until the enactment of the 2010 Regulations. There have been no legislative amendments or adjustments in response to the global economic and financial crisis.

5 Is there any sector-specific procurement legislation supplementing the general regime?

Not under national law.

APPLICABILITY OF PROCUREMENT LAW

6 Which, or what kinds of, entities have been ruled not to constitute contracting authorities?

The Irish High Court referred to the European Court of Justice the question as to the definition of a public body falling within the scope of public procurement law in case C-306/97 Connemara Machine Turf Co Limited v Coillte Teoranta [1998] ECR I – 8761. The Irish courts, however, have not made a specific ruling to the effect that specific bodies do not come within the scope of public procurement law. A 'contracting authority' is defined in the 2006 (Public Sector) Regulations as 'the State, a local authority or a public authority, or an association comprising one or more local authorities or public authorities, or local authorities and public authorities' and a 'contracting entity in the 2007 (Utilities) Regulations which also includes privately owned utility entities authorised under especial and exclusive rights.

7 For which, or what kinds of, entities is the status as a contracting authority in dispute?

There are no particular reported decisions of the superior courts (Supreme Court and High Court) in Ireland governing this issue.

8 Are there specific domestic rules relating to the calculation of the threshold value of contracts?

The 2006 (Public Sector) Regulations and the 2007 (Utilities) Regulations incorporate the provisions of the 2004 Directives, as amended, in this respect but there are no other specific national provisions. In other respects, certain general provisions and principles of Irish national law may be pertinent including, in particular, the principles of statutory interpretation that govern anti-avoidance provisions.

These will have been litigated in other sectors (such as taxation law) but might well be deemed relevant by analogy in this context.

9 Does the extension of an existing contract require a new procurement procedure?

This can be considered in accordance with the provisions of the 2004 Directives and transposing Regulations. In general, depending upon the facts, if an extension has not been provided for in tender documents, notices or elsewhere, the 'extension' of an existing contract may well be considered as a new contract which, assuming that no relevant exemption is applicable, would require a new procurement procedure to be initiated. The materiality test elaborated in case C- 454/06, Pressetext would be relevant. The remedy of ineffectiveness for illegal direct awards under Directive 2007/66/EC and the 2010 Regulations may be triggered by such an extension.

10 Does the amendment of an existing contract require a new procurement procedure?

The principles governing such an amendment would be broadly similar to those governing an extension and there is no specific wider provision under Irish national law.

11 May an existing contract be transferred to another supplier or provider without a new procurement procedure?

There are no specific Irish rules governing the transfer of a contract to another supplier or provider without a new procurement procedure. However, it is common practice in commercial contract awards to allow for certain transfers to take place including, for example, on large projects to allow for subcontracting, generally with the approval of the awarding authority. Transfer or novations in the context of insolvency or the credit crunch has become topical.

12 In...