The procurement regulations set down the rights and remedies available to unsuccessful tenderers who have suffered or are likely to suffer loss as a result of a breach of those regulations.

Where the aggrieved tenderer can show that a breach has occurred the court can:

• suspend the process
• set aside the decision leading to the contract award
• declare the contract ineffective
• award damages

However the regulations only apply to works, services and supplies contracts over certain values.

Does this mean that a court action cannot be raised by an aggrieved tenderer where the procurement contract is below a predetermined value (threshold)?

The recent case of Sidey Limited v Clackmannanshire Council has provided some clarity on this question.

• The contract was awarded to the 3rd placed bidder
• Sidey raised an action against the Council for breaches of the procurement regulations
• On appeal, The Inner House of the Court of Session ruled that the procurement regulations applied only to contracts above a certain financial limit. Therefore disputes relating to below threshold contracts should be resolved by other means, including judicial review.

Sidey petitioned for judicial review of the Council decision to award the contract to the 3rd placed bidder. The judgement was published on 24 November 2011 and the court found that the Council had acted irrationally and in error of law.

Therefore if a tenderer disputes a below threshold procurement, it cannot raise an action for breach of the regulations, but can seek recourse through judicial review. Judicial review proceedings must be raised in the Court of Session, which can be costly for both the pursuer and the defender.

If you have any concerns regarding your procurement process, please contact us.