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Procurement and Outsourcing Journal: July/August 2011

Catherine Wolfenden examines some areas of forthcoming reform of the procurement regulations

The Public Contracts Regulations 2006 (Regulations) are changing. The entry into force of the Bribery Act 2010 on 1 July 2011, coupled with European case law on limitation periods, mean significant amendments to the Regulations are expected later this year. The Utilities Contracts Regulations 2006 will also be amended.

Angus Walker looks at the likely shape of the Localism Act

The Localism Bill promises to shake up local government and the planning system through a raft of changes under the umbrella of ‘localism’ or ‘people power’. There are also changes to social housing law, and to the regime for the authorisation of nationally significant infrastructure projects that was introduced by the Planning Act 2008. Here is an outline of the main provisions of the Bill.

David McGowan and Michelle Boles review the case law on disclosure of third-party confidential documents in procurement litigation

The lot of the unsuccessful tenderer is not a happy one. Fortunately, there is help at hand. Regulation 32(2)(b) of The Public Contracts Regulations 2006 requires contracting authorities, inter alia, to provide unsuccessful tenderers with the reasons why their bid was unsuccessful, together with the characteristics and relative advantages of the successful tender. The reasoning adopted by the contracting authority should be disclosed clearly and unequivocally so as to make the economic operators concerned aware of the reasons for the contracting authority’s decision and thereby enable them to defend their rights, but also so as to enable the courts to exercise their supervisory function (Strabag Benelux NV v Council of the European Union [2003]). It is not surprising that, in many procurement disputes, the formulation of this obligation tends to lead to a comparison between bids.

Peter Jansen contemplates recent case law on injunctive relief

Historically, English courts were reluctant to injunct banks from paying unjustified demands made under unconditional or ‘on demand’ performance bonds. The same has applied to cases where the bond holder is making the call. These bonds require the bank to make payment against a demand without any enquiry as to the alleged default. Only in a case of clear and obvious fraud will the courts normally allow an application to restrain a call or payment. However, a distinction is drawn between applications against a bank (the issuer) and where the defendant is the bond holder (making the call). The normal rule that fraud needs to be established cannot be used in effect to allow a beneficiary to call an on demand performance bond where the underlying contract expressly does not permit it. Simon Carves Ltd v Ensus UK Ltd [2011] is a case where a call was restrained in this way.

Quigg Golden

Jonathan Parker assesses the treatment of abnormally low tenders

The coming into force of the Public Contracts (Amendment) Regulations 2009 on 20 December 2009 has provided practitioners, Contracting Authorities (CAs) and Economic Operators (EOs) with a comprehensive armoury of remedies. The question will be to what extent, if at all, this will result in greater judicial intervention in the procurement arena.

Anthony Woolich, Simon Burden and Jaime van der Eb consider the implications of the Bribery Act and the Proceeds of Crime Act for the ‘innocent’ company

The Bribery Act 2010 came into force on 1 July 2011. Readers will doubtless be aware that the Act creates a number of criminal offences on the payment and acceptance of bribes, this includes a new strict liability offence for failure of a commercial organisation to prevent bribery, subject to a defence of having in place adequate procedures. In this article we consider the legal implications of bribery where an employee of a company (the ‘briber’) has paid a bribe to the employee of a company (the ‘victim’) and the victim has entered into a contract (the ‘underlying contract’) as a result.

Ben Rayment discusses the continued application of the American Cynamid principles under the new Public Procurement Remedies Regime

This article examines whether the new Public Procurement Remedies Regime might make it easier for disappointed tenderers to obtain an interim injunction preventing contracting authorities from entering into the contract with the successful bidder.

Peter Elliott and Mark Livsey analyse the law on contractual variation before and after Pressetext

The question whether contracting authorities can safely make changes to current contracts without creating a new contract, which ought to be competed, has always been a significant issue, yet it is one on which there has been a dearth of useful case law until relatively recently.