Collapsing a Procurement

• EU
  • Directive 2014/24

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    • Article 55 - Informing candidates and tenderers
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      “1.   Contracting authorities shall as soon as possible inform each candidate and tenderer of decisions reached concerning the conclusion of a framework agreement, the award of the contract or admittance to a dynamic purchasing system, including the grounds for any decision not to conclude a framework agreement, not to award a contract for which there has been a call for competition, to recommence the procedure or not to implement a dynamic purchasing system.”

• UK
  • UK Procurement Act 2023

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    • 55. Procurement termination notices
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      55 Procurement termination notices

      (1) This section applies if, after publishing a tender or transparency notice in respect of a public contract, a contracting authority decides not to award the contract.

      (2) As soon as reasonably practicable after making the decision, the contracting authority must give notice to that effect.

      (3) This section does not apply to private utilities.

    • S.78 Implied right to terminate public contracts
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      78 Implied right to terminate public contracts

      (1) It is an implied term of every public contract that the contract can, if a termination ground applies, be terminated by the contracting authority in accordance with this section.

      (2) Each of the following circumstances is a termination ground—

      (a) the contracting authority considers that the contract was awarded or modified in material breach of this Act or regulations made under it;

      (b) a supplier has, since the award of the contract, become an excluded supplier or excludable supplier (including by reference to an associated person);

      (c) a supplier (other than an associated person) to which the supplier is sub-contracting the performance of all or part of the public contract is an excluded or excludable supplier.

      (3) The termination ground in subsection (2)(c) is not available unless—

      (a) the contracting authority requested information under section 28(1)(a) (information about sub-contractors) in relation to the award of the public contract, and

      (b) subsection (4), (5) or (6) applies.

      (4) This subsection applies if, before awarding the public contract, the contracting authority did not know the supplier intended to sub-contract the performance of all or part of the contract.

      (5) This subsection applies if—

      (a) the sub-contractor is an excluded or excludable supplier under section 57(1)(b) or (2)(b) (the debarment list), and

      (b) before awarding the contract the contracting authority—

      (i) sought to determine whether that was the case in accordance with section 28(1)(b), but

      (ii) did not know that it was.

      (6) This subsection applies if—

      (a) the sub-contractor is an excluded or excludable supplier under section 57(1)(a) or (2)(a),

      (b) the contracting authority requested information about the sub-contractor under section 28(2), and

      (c) before awarding the contract, the contracting authority did not know that the sub-contractor was an excluded or excludable supplier.

      (7) Before terminating a contract by reference to the term implied by subsection (1), a contracting authority must—

      (a) notify the supplier of its intention to terminate,

      (b) specify which termination ground applies and why the authority has decided to terminate the contract,

      (c) give the supplier reasonable opportunity to make representations about—

      (i) whether a termination ground applies, and

      (ii) the authority’s decision to terminate.

      (8) Before terminating a contract by reference to the fact that a supplier to which the supplier is sub-contracting is an excluded or excludable supplier (whether under subsection (2)(b) or (c)), a contracting authority must give the supplier reasonable opportunity to—

      (a) cease sub-contracting to the excluded or excludable supplier, and

      (b) if necessary, find an alternative supplier to which to sub-contract.

      (9) A public contract may contain provision about restitution and other matters ancillary to the termination of the contract by reference to the term implied by subsection (1).

      (10) But any term purporting to restrict or override the implied term is without effect.

      (11) In subsection (2)(b), the reference to a supplier becoming an excludable supplier includes a reference to—

      (a) a supplier becoming an excludable supplier on the basis of a discretionary exclusion ground that—

      (i) did not apply before award of the contract, or

      (ii) applied before award of the contract by reference to different circumstances, and

      (b) a contracting authority discovering that, before award of the contract, the supplier was an excludable supplier.

      (12) In this section, “material breach” means a breach that the contracting authority considers could reasonably result in a successful legal challenge under Part 9 or otherwise.

    • 79 Terminating public contracts: national security
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      79 Terminating public contracts: national security

      (1) A relevant contracting authority may not terminate a contract by reference to the implied term in section 78 on the basis of the discretionary exclusion ground in paragraph 14 of Schedule 7 (threat to national security) unless—

      (a) the authority has notified a Minister of the Crown of its intention, and

      (b) the Minister considers that—

      (i) the supplier or sub-contractor is an excludable supplier by reference to paragraph 14 of Schedule 7, and

      (ii) the contract should be terminated.

      (2) A relevant contracting authority may not terminate a contract by reference to the implied term in section 78 on the basis of the mandatory exclusion ground in paragraph 35 of Schedule 6 (threat to national security) unless the authority has notified a Minister of the Crown of its intention.

      (3) In this section, a “relevant contracting authority” means a contracting authority other than—

      (a) a Minister of the Crown or a government department,

      (b) the Corporate Officer of the House of Commons, or

      (c) the Corporate Officer of the House of Lords.

    • 80 Contract termination notices
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      80 Contract termination notices

      (1) Before the end of the period of 30 days beginning with the day on which a public contract is terminated, a contracting authority must publish a contract termination notice.

      (2) A “contract termination notice” is a notice setting out—

      (a) that the contract has been terminated, and

      (b) any other information specified in regulations under section 95.

      (3) In this section, a reference to termination includes a reference to—

      (a) discharge,

      (b) expiry,

      (c) termination by a party,

      (d) rescission, or

      (e) set aside by court order (whether or not under Part 9).

      (4) This section does not apply—

      (a) to private utilities, or

      (b) in relation to a contract awarded under section 41 by reference to paragraph 15 of Schedule 5 (direct award: user choice contracts).

  • The Procurement Regulations 2024

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    • 37 Procurement Termination Notices
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      Procurement termination notices

      37.—(1) This regulation sets out what information must be included in a procurement termination notice published under section 55(2) of the PA 2023.

      (2) The information is—

      (a) the contracting authority information,

      (b) the title of the procurement,

      (c) the unique identifier for the procurement,

      (d) a statement to the effect that, following the publication of a tender or transparency notice in respect of a contract, the contracting authority has decided not to award the contract, and

      (e) the date when the contracting authority decided not to award the public contract.

      (3) Nothing in this regulation prevents a contracting authority from publishing other information that relates to the same procurement in a procurement termination notice.

    • 41 Contract Termination Notices
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      Contract termination notices

      41.—(1) This regulation sets out other information which must be included in a contract termination notice published under section 80(1) of the PA 2023.

      (2) The information is—

      (a) the contracting authority information,

      (b) the title of the procurement,

      (c) the unique identifier for—

      (i) the procurement,

      (ii) the public contract,

      (d) for each supplier party to the public contract—

      (i) the supplier’s name,

      (ii) the supplier’s contact postal address and email address, and

      (iii) the unique identifier for the supplier,

      (e) the reasons why the public contract has been terminated (including any reason mentioned in section 80(3) of the PA 2023),

      (f) the date when the public contract was terminated,

      (g) the estimated value of the public contract,

      (h) where the termination of the public contract was the result of the supplier breaching the contract—

      (i) a statement that section 71(5) of the PA 2023 applies because the supplier breached the public contract,

      (ii) whether the breach resulted in—

      (aa) the award of damages;

      (bb) a settlement agreement between the supplier and the contracting authority,

      (iii) the date of—

      (aa) any award of any damages, or

      (bb)any settlement,

      (iv) where the supplier did not perform the public contract to the contracting authority’s satisfaction, the date when the contracting authority considered that the supplier had failed to improve its performance in accordance with section 71(4)(c),

      (v) an explanation of the nature of the contractual obligation which was breached or was not performed to the contracting authority’s satisfaction,

      (vi) an explanation of the nature of the breach or failure to perform including—

      (aa) an explanation of the impact or consequences of the breach or failure to perform,

      (bb) the duration of the breach or failure to perform,

      (cc) an explanation of any steps taken by the supplier to mitigate the impact or consequences of the breach or failure to perform,

      (dd) any steps that the contracting authority took to notify the supplier of the breach or failure to perform and encourage them to improve the situation, including any warning notices given under the public contract or other proper opportunity to improve performance pursuant to section 71(4)(b) of the PA 2023,

      (ee) what steps, if any, were taken by the supplier to improve the situation and why these were not sufficient, and

      (vii) where there was an award of damages or other monies paid following the breach or failure to perform—

      (aa) confirmation that this is the case,

      (bb) the amount of damages or other monies paid,

      (cc) the basis on which the damages were awarded or other monies paid, for example in accordance with the public contract, a decision of a court or tribunal or a negotiated settlement, and

      (dd) where there is a recorded decision of a court or tribunal finding that there was a breach, a link to the web page where the decision can be accessed or a copy of the decision.

      (3) Nothing in this regulation prevents a contracting authority from publishing other information that relates to the same procurement in the notice.

• England and Wales
  • Apcoa Parking (UK) Ltd v The Lord Mayor and Citizens of the City of Westminster [2010] EWHC 943 (QB) (Eady J)

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    Region: England and Wales

    “24.  As a matter of procurement law, it is recognised that there is a right to abandon a procurement procedure. That is apparent from Regulation 32(11) of the 2006 Regulations, cited above. It is also consistent with a number of decisions of the European Court of Justice in this context. My attention was drawn to the decision of the Court of First Instance in Embassy Limousines v European Parliament [1999] 1 CMLR 667 at [54]; to Metalmecannica Fracasso SpA v Amt der Salzburger Landesregierung [1999] ECR I-5697 at [30]-[34]; to Hospital Ingenieure v Stadt Wien [2004] 3 CMLR 16 at [41]; and to Kauppatalo Hansel v Imatran Kaupunki [2004] 3 CMLR 17 at [36].

    25. This aspect of the law is also considered in Arrowsmith, The Law of Public Utilities and Procurements (2nd edn), at paras. 7.168-7.169. It is there acknowledged that there is a “broad discretion” to terminate a particular tender procedure and examples are cited where this might be appropriate. Two that are relevant in the present circumstances are (a) where it has become apparent that a new procedure is likely to yield a better result and (b) where there has been a mistake in carrying out the first procedure.

    26. I have come to the conclusion, therefore, that the essential foundation of the Claimant’s argument is unsound in law.”

  • Amey v West Sussex County Council [2019] EWHC 1291 (TCC) (Stuart-Smith J)

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    Region: England and Wales

    Decision to abandon procurement following a challenge to an award decision was lawful

    “12. [The] following general principles may be relevant:

    a. A contracting authority has a broad discretion in assessing the factors to be taken into account for the purpose of deciding to award a contract following an invitation to tender and therefore in respect of any decision not to award a contract and abandon a procurement (see Embassy Limousines & Services v. European Parliament T-203/96 [1999] 1 C.M.L.R. 667 at [56]);

    b. The exercise of that discretion is not limited to exceptional cases or has necessarily to be based on serious grounds (see Metalmeccanica Fracasso SpA v. Amt de Salzburger Landesregierung [1999] ECR I-5697, [2000] 2 CMLR 1150 at [23]);

    c. There is no implied obligation under the Public Contracts Directive or the Regulations to carry the award procedure to its conclusion (see Metalmeccanica supra. at [24] and [33]);

    d. Neither the Public Contracts Directive nor the Regulations contain any specific provision concerning “the substantive or formal conditions” for the decision not to award a contract/to abandon a procurement. But, the decision is “subject to the fundamental rules of Community law, and in particular to the principles laid down by the EC Treaty on the right of establishment and the freedom to provide services” (see Hospital Ingenieure (“HI”) v. Stadt Wien [2004] 3 CMLR 16 at [42] and [47]);

    e. The duty to notify reasons in the Public Contracts Directive and the Regulations is “dictated precisely by concern to ensure a minimum level of transparency in the contract-awarding procedures … and hence compliance with the principle of equal treatment” (see HI supra. at [46]);

    f. The courts of member states must be able to determine the lawfulness of a decision to abandon a procurement, and it is contrary to the provision of Directive 89/665 (“the Remedies Directive”) to limit the review of the legality of the decision to “mere examination of whether it was arbitrary” (see HI supra. at [61]-[64]);

    g. A contracting authority has power to abandon a procurement without contract award “when it discovers after examining and comparing the tenders that, because of the errors committed in its preliminary assessment, the content of the invitation to tender makes it impossible for it to accept the most economically advantageous tender, provided that, when it adopts such a decision, it complies with the fundamental rules of Community law on public procurement such as the principle of equal treatment” (see Kauppatalo Hansel v. Imatran Kaupunck [2003] ECR I-12139 at [36]);

    h. EU law permits member states to provide in their legislation for “the possibility to withdraw an invitation to tender on grounds which may be based on reasons which reflect inter alia the assessment as to whether it is expedient, from the point of view of the public interest, to carry an award procedure to its conclusion, having regard, amongst other things, to any change that may arise in the economic context or factual circumstances, or indeed the needs of the contracting authority concerned. The grounds for such a decision may also relate to there being an insufficient degree of competition, due to the fact that, at the conclusion of the award procedure in question, only one tenderer was qualified to perform the contract” (see Croce Amica One Italia SrL v. AREU [2015] PTSR 600 at [35]).”

    “83.  I reject Amey’s primary case which is advanced on the basis that the premise for the Council’s decision was that it would extinguish Amey’s claim in the First Action. In the event, the hope and belief (which was evidently founded on advice) has proved to be misplaced. However, viewed overall, I am not persuaded that the decision to abandon the Procurement was irrational. On the contrary, it was a rational attempt to preserve public funds taking into account a number of factors including (a) avoiding the double bind of contracting with Ringway and litigating the Amey claim to a conclusion, (b) taking into account the potential costs that would be saved if the First Action could be disposed of, (c) taking into account the additional costs that would be incurred by not entering into the contract with Ringway, (d) taking into account the need to secure the provision of critical services over the coming winter and (e) taking into account the possibility of developing a more advantageous solution on a re-procurement, as has been done. Even allowing for the inability to terminate Amey’s claim in the First Action, Amey has not shown that there was any better approach for the Council to take than abandoning the Procurement and starting again while securing the provision of interim services from Balfour Beatty. Put another way, Amey has not shown that the decision was not expedient in the public interest.”

  • Ryhurst Limited v Whittington Health NHS Trust [2020] EWHC 448 (TCC) (Davies HHJ)

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    Region: England and Wales

    Decision to abandon procurement, after award decision had been made, was lawful, with the decision being informed by various factors

    “(i) Breach of the obligations of equal treatment, non-discrimination, proportionality and avoiding manifest error

    245. I can take these obligations together since, on my analysis of the law, they all involve essentially the same inquiry, which is whether or not the decision to abandon the SEP procurement exercise in the circumstances prevailing in June 2018 was one which the Trust, as a public authority having to balance a wide range of relevant factors and interests, could properly have arrived at in compliance with its fundamental EU procurement obligations.

    246. In answering that question I have already found that: (a) the decision was made by the Trust Board at the meeting in June 2018, which was not – as Ryhurst has contended – simply a rubber stamping exercise for a decision taken some time earlier by the Trust executive and informally acquiesced in by the Trust Board in previous informal sessions; (b) the decision was made on the basis of the June report; (c) the June report made reference to there being four principal reasons justifying the decision to abandon, of which the Grenfell connection was only relevant to one (stakeholder support); (d) the first two reasons, namely the improved financial position of the Trust and the strengthened relations with other partner organisations, were both genuine and proper and rational reasons for making the decision; (e) the third reason, the stakeholder support reason was itself not solely or even principally to do with the Grenfell connection since: (i) although the Grenfell connection was plainly a significant reason underlying a large part of the political opposition to Ryhurst, it was not the only reason; (ii) there were other perfectly proper and rational reasons for the lack of stakeholder support; and (iii) it was the fact of the lack of stakeholder support and the lack of any reasonable prospect of that being overcome which was the real reason for the Trust to take this into account, rather than the reasons which underpinned the lack of stakeholder support; (f) the fourth reason, the need for NHSI approval for all projects under the SEP, was also a genuine and a proper and rational reason.

    247. In all of those circumstances I am quite unable to conclude that the decision was one which breached the Trust’s obligations of equal treatment, non-discrimination, proportionality or avoiding manifest error. Ryhurst has failed in its core case that the reason for the abandonment was political pressure based solely or primarily on the Grenfell connection. There were a number of rational reasons for abandoning the SEP procurement which the Trust Board was entitled to and did take into account in reaching its decision. One reason, which was indeed a primary reason, for the decision was the lack of stakeholder support. It is true that one reason, which was indeed a primary reason, for the lack of stakeholder support was the Grenfell connection. However, it was not the only reason and there were other reasons, and rational reasons, for the lack of stakeholder support which were either wholly unconnected with Grenfell or which were connected but rational (i.e. the risk that the SEP might be compromised during its lifetime by the failure of the Rydon Group due to Grenfell).”

• EU - CJEU
  • Case C-27/98 Metalmeccanica Fracasso SpA v Amt der Salzburger

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    Region: EU - CJEU

    No requirement to award contract where one tenderer remaining

    “23. [It] must be observed that Article 8(2) of Directive 93/37, which requires a contracting authority to inform candidates or tenderers as soon as possible of the grounds on which it decided not to award a contract in respect of which a prior call for competition was made, or to recommence the procedure, does not provide that such a decision is to be limited to exceptional cases or has necessarily to be based on serious grounds.

    24. Similarly, as regards Articles 7, 18 and 30 of Directive 93/37, governing the procedures to be followed for the award of public works contracts and determining the applicable criteria for awarding them, it need merely be observed that no obligation to award the contract in the event that only one undertaking proves to be suitable can be inferred from those provisions.

    25. It follows that the contracting authority’s option, implicitly recognised by Directive 93/37, to decide not to award a contract put out to tender or to recommence the tendering procedure is not made subject by that directive to the requirement that there must be serious or exceptional circumstances.”

  • Case C-92/00 HI

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    Region: EU - CJEU

    Decision to abandon a public procurement procedure is subject to review; but the discretion is broad

    “47 It follows that, even though Directive 92/50 does not specifically govern the detailed procedures for withdrawing an invitation to tender for a public service contract, the contracting authorities are nevertheless required, when adopting such a decision, to comply with the fundamental rules of the Treaty in general, and the principle of non-discrimination on the ground of nationality, in particular (see, by way of analogy, concerning the conclusion of public service concessions, Telaustria and Telefonadress, paragraph 60).

    48 Since the decision of a contracting authority to withdraw an invitation to tender for a public service contract is subject to the relevant substantive rules of Community law, it has to be concluded that it also falls within the rules laid down by Directive 89/665 in order to ensure compliance with the rules of Community law on public contracts.

    55 Article 1(1) of Directive 89/665 requires the decision of the contracting authority to withdraw the invitation to tender for a public service contract to be open to a review procedure, and to be capable of being annulled where appropriate, on the ground that it has infringed Community law on public contracts or national rules implementing that law.”

  • Case C-244/02 Kauppatalo Hansel Oy v Imatran kaupunki

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    Region: EU - CJEU

    Confirmation of broad discretion to abandon a procurement; Tender procedure set up on the basis of lowest price may be abandoned where the contracting authority cannot obtain MEAT

    “36. Directive 93/36 is to be interpreted as meaning that a contracting authority which has commenced a procedure for the award of a contract on the basis of the lowest price may discontinue the procedure, without awarding a contract, when it discovers after examining and comparing the tenders that, because of errors committed by itself in its preliminary assessment, the content of the invitation to tender makes it impossible for it to accept the most economically advantageous tender, provided that, when it adopts such a decision, it complies with the fundamental rules of Community law on public procurement such as the principle of equal treatment.”

  • Case C-440/13 AREU

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    Region: EU - CJEU

    Further confirmation of a contracting authority’s right to abandon a procurement; not limited to exceptional circumstances; No requirement to award contract where one tenderer remaining

    “31  It should be noted in that regard that, according to the Court’s case-law, Article 8(2) of Council Directive 93/37/EEC of 14 June 1993 concerning the coordination of procedures for the award of public works contracts (OJ 1993 L 199, p. 54), a provision similar to Article 41(1) of Directive 2004/18, does not provide that a decision by a contracting authority not to award a public contract is to be limited to exceptional cases or has necessarily to be based on serious grounds (judgment in Fracasso and Leitschutz, Case C‑27/98, EU:C:1999:420, paragraphs 23 and 25).

    32      Similarly, the Court has also held that, although Article 12(2) of Council Directive 92/50/EEC of 18 June 1992 relating to the coordination of procedures for the award of public service contracts (OJ 1992 L 209, p. 1), a provision also similar to Article 41(1) of Directive 2004/18, requires the contracting authority to notify candidates and tenderers of the grounds for its decision if it decides to withdraw the invitation to tender for a public contract, there is no implied obligation on that authority to carry the award procedure to its conclusion (see judgment in HI, Case C‑92/00, EU:C:2002:379, paragraph 41).

    33      However, the Court has been careful to point out that the requirement to communicate the grounds for a decision to withdraw an invitation to tender is dictated by the concern to ensure a minimum level of transparency in public procurement procedures to which EU rules apply, and hence compliance with the principle of equal treatment, which forms the basis of those rules (see, to that effect, judgment in HI, EU:C:2002:379, paragraphs 45 and 46 and the case-law cited).”

  • Case C-391/15 Marina del Mediterráneo

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    Region: EU - CJEU

    Every decision of a contracting authority is subject to review; Decision permitting a tenderer to participate in a procurement is subject to review

    “26      It should be noted that the wording of Article 1(1) of Directive 89/665 assumes, by using the words ‘as regards … procedures’, that every decision of a contracting authority falling under EU rules in the field of public procurement and liable to infringe them is subject to the judicial review provided for in Article 2(1)(a) and (b) of that directive. That provision thus refers generally to the decisions of a contracting authority without distinguishing between those decisions according to their content or time of adoption (see judgment of 11 January 2005, Stadt Halle and RPL Lochau, C‑26/03, EU:C:2005:5, paragraph 28 and the case-law cited).

    27      That broad construction of the concept of a ‘decision’ taken by a contracting authority is confirmed by the fact that Article 1(1) of Directive 89/665 does not lay down any restriction with regard to the nature or content of the decisions it refers to. Moreover, a restrictive interpretation of that concept would be incompatible with the terms of Article 2(1)(a) of that directive which requires Member States to make provision for interim relief procedures in relation to any decision taken by the contracting authorities (see, to that effect, judgment of 11 January 2005, Stadt Halle and RPL Lochau, C‑26/03, EU:C:2005:5, paragraph 30 and the case-law cited).

    28      It follows that a decision allowing a tenderer to participate in a public procurement procedure, such as that at issue in the main proceedings, constitutes a decision within the meaning of Article 1(1) of Directive 89/665.”

• EU - General Court
  • Case T-125/06 Centro Studi Manieri Srl v Council

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    Region: EU - General Court

    General Court rejects a challenge to a decision to abandon a tender and award a contract for creche provision to another EU institution (such other contract not being subject to the EU’s procurement rules)

  • Cases T-383/06 and T-71/07 Icuna.Com SCRL v Parliament

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    Region: EU - General Court

    Parliament could abandon procurement after the contract was signed, where the counter-party had agreed to the annulment of the contract

    Article 101 of the Financial Regulation (Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities) provided:

    ‘The contracting authority may, before the contract is signed, either abandon the procurement or cancel the award procedure without the candidates or tenderers being entitled to claim any compensation.

    The decision must be substantiated and be brought to the attention of the candidates or tenderers.’

    The applicant initially challenged the award of the contract to Mostra. Following the issuing of an application for interim measures by the Applicant, in which it sought the suspension of the operation of the decision to award the contract to Mostra, the Parliament signed the contract with Mostra. The General Court ordered the Parliament to suspend the operation of the contract until a final order had been made. The Parliament and Mostra signed a supplementary agreement which annulled the earlier contract. The Parliament subsequently annulled the procurement procedure. The applicant challenged the decision to annul the procedure and sought damages.

    “58      The Court finds that the Parliament was competent to adopt the decision of 31 January 2007. The contrary opinion of the applicant is based on a misinterpretation of the first paragraph of Article 101 of the Financial Regulation, which is intended to settle the conflict between the private interests of the tenderers and the successful tenderer, on the one hand, and, on the other hand, the general interest which the contracting authority is supposed to pursue, where the contracting authority abandons the procurement or annuls the tendering procedure. It is necessary to distinguish two stages in connection with the application of that provision.

    59      First, the contracting authority is not bound before the signature of the contract with the tenderer chosen and may thus, in the context of its task relating to the general interest, freely abandon the procurement or annul the award procedure. In that case, Article 101 of the Financial Regulation precludes any entitlement to compensation on the part of the candidates or tenderers on account of such an abandonment or cancellation.

    60      Secondly, after the signature of the contract, the contracting authority is bound contractually towards the selected tenderer. It can therefore, as a rule, no longer unilaterally abandon the procurement or annul the tendering procedure. The situation can be different only as a result of exceptional circumstances such as those in the present case where the contracting parties decided, by common accord, to abandon the contract.

    61      The contrary interpretation of the first paragraph of Article 101 of the Financial Regulation suggested by the applicant, according to which the contracting authority no longer has the competence to annul the award procedure once the contract with the successful tenderer has been signed, even if the successful tenderer has abandoned his contractual position, would, in cases like the present case, where the contracting authority found, after signature of the contract, that there may have been irregularities in the award procedure, risk placing the parties to that procedure in an impasse. First, the performance of the contract would, in such a situation, expose them to the risk of being ordered to suspend the operation of that contract, which was, incidentally, ordered provisionally in the present case, or to the annulment of the award decision, following an action brought by an unsuccessful tenderer before the Court of First Instance. Secondly, the contracting authority could not annul the procedure or abandon the procurement even if the successful tenderer were prepared to abandon the contract as it was here. Article 101 of the Financial Regulation cannot be interpreted as running counter to the common intention of the parties to the contract to terminate that contract without having begun to implement it. In such circumstances, the contracting authority therefore has the right to annul the tendering procedure.

    62      Consequently, the legal rationale behind Article 101 of the Financial Regulation and the principle of legal certainty mean that, in the circumstances of the present case, the Parliament must be held to have had the competence to annul the tendering procedure.”

• Netherlands
  • Van Wijnen Projectontwikkeling West B.V. v NGemeente Alphen aan den RijnL:RBDHA:2025:7143

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    Region: Netherlands

    Contracting authority was entitled to cancel a competition, after review proceedings were brought, where a sub-criterion was unclear

    Decision of the Hague District Court

     

• Northern Ireland
  • Federal Security Services Limited v The Northern Ireland Court Service v Resource (NI) Limited [2009] NIQB 15 (McCloskey J)

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    Region: Northern Ireland

    Decision to abandon procurement, where requirements were not clearly formulated, complied with the principle of proportionality and was lawful

    “55 The impugned decision was harmonious with the principle of proportionality. Properly analysed, the view formed by the Defendant, expressed in its internal documents and in the letter of decision, dated 8th December 2006, was that the instructions to tenderers and associated documents did not comply with the principle of transparency and the associated principle of equal treatment, as explained in the European jurisprudence. As appears from the above, I concur with this conclusion. To have proceeded further, awarding the contract, would have been in breach of European law. Furthermore, the principles of transparency and equal treatment are key elements of the Directive and the 2006 Regulations. The legitimacy of the aim to be achieved in deciding to abort the existing competition and initiate a fresh one cannot be gainsaid. A fresh competition, curing the shortcomings which blighted its predecessor, will ensure that the EU law principle of transparency and the associated principle of equal treatment will be fully observed.”

• Scotland
  • Roche Diagnostics Ltd v Greater Glasgow Health Board [2024] CSOH 55

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    Region: Scotland

    Court refuses to strike out claim that contracting authority engaged in an unlawful means conspiracy with incumbent to collapse a competition which the pursuer had won and to extend the incumbent’s contract; also, Court refused to strike out claim that the extended contract was an unlawful modification

    Lord Richardson

    “[56]      The starting point for the pursuer’s case was that, as the preferred bidder in the procurement exercise run by the first defender, had that exercise been completed, the pursuer would have been awarded the contract. However, instead, the second defender had challenged the first defender’s procurement exercise. During the course of the second defender’s challenge, the defenders had engaged in discussions. The pursuer’s case was that, in those discussions, the second defender had essentially threatened not to perform its obligations in terms of clause 18.9(1) of the parties’ contract. That had led to the defenders entering into an agreement in terms of which the contract was extended for 44 months. In reliance on that agreement, the first defender took the decision to abandon its procurement exercise and the second defender did not persist in its challenges…

    [82] I consider that the pursuer has pled a relevant case of constructive intent on the basis that, in the circumstances of the procurement exercise involving the three parties, both defenders should have known that injury to the pursuer would ensue from the allegedly unlawful extension of the second defender’s contract (JSC at paragraph 13). As such, on the pursuer’s averments, the infliction of harm on the pursuer can properly be said to have been the means by which the defenders intended to achieve their respective ends of the extension of the second defender’s contract. On the pursuer’s averments, the pursuer’s loss was more than merely a foreseeable outcome of the extension of the second defender’s contract. The pursuer’s averments thus satisfy the criterion detailed in OBG by Lord Hoffman (at paragraph 62).”

A decision by a contracting authority to collapse a procurement is subject to review

“Article 1(1) of Directive 89/665 requires the decision of the contracting authority to withdraw the invitation to tender for a public service contract to be open to a review procedure, and to be capable of being annulled where appropriate, on the ground that it has infringed Community law on public contracts or national rules implementing that law” (Case C-92/00 HI [55])

The decision to collapse is subject to the fundamental principles of EU law

“[Provided] the principles of transparency and equal treatment are complied with, a contracting authority cannot be required to carry to its conclusion an award procedure that has been initiated and to award the contract in question, including where there remains only one tenderer in contention” (Case C‑440/13 AREU [36])

The ability to collapse is not limited to exceptional circumstances

The procurement directives do “not provide that a decision by a contracting authority not to award a public contract is to be limited to exceptional cases or has necessarily to be based on serious grounds” (Case C‑440/13 AREU [31])

A contracting authority may collapse a procurement due to its own errors

“[A] contracting authority which has commenced a procedure for the award of a contract on the basis of the lowest price may discontinue the procedure, without awarding a contract, when it discovers after examining and comparing the tenders that, because of errors committed by itself in its preliminary assessment, the content of the invitation to tender makes it impossible for it to accept the most economically advantageous tender” (Case C-244/02 Kauppatalo, [36]).

Two examples of reasons for abandoning a procurement are “(a) where it has become apparent that a new procedure is likely to yield a better result and (b) where there has been a mistake in carrying out the first procedure” (Apcoa Parking (UK) Ltd v The Lord Mayor and Citizens of the City of Westminster [2010] EWHC 943 (QB) [25]).

A contracting authority may abandon a procurement where it is economically expedient

“The grounds for such a decision may thus be based on reasons which reflect, inter alia, the assessment as to whether it is expedient, from the point of view of the public interest, to carry an award procedure to its conclusion, having regard, among other things, to any change that may arise in the economic context or factual circumstances, or indeed the needs of the contracting authority concerned. The grounds for such a decision may also relate to there being an insufficient degree of competition, due to the fact that, at the conclusion of the award procedure in question, only one tenderer was qualified to perform the contract” (Case C‑440/13 AREU [35])

A contracting authority is required to notify tenderers of the grounds for its decision to collapse

The procurement directives require “the contracting authority to notify candidates and tenderers of the grounds for its decision if it decides to withdraw the invitation to tender for a public contract” (Case C-440/13 AREU [32])

“[The] duty to notify reasons for a decision to withdraw an invitation to tender, laid down by Article 12(2) of Directive 92/50, is dictated precisely by concern to ensure a minimum level of transparency in the contract-awarding procedures to which that directive applies and hence compliance with the principle of equal treatment” (Case C-92/00 HI [46])

A contracting authority can collapse a procurement procedure after the contract is signed, where the counter-party agrees to the annulment of the contract

“[After] the signature of the contract, the contracting authority is bound contractually towards the selected tenderer. It can therefore, as a rule, no longer unilaterally abandon the procurement or annul the tendering procedure. The situation can be different only as a result of exceptional circumstances such as those in the present case where the contracting parties decided, by common accord, to abandon the contract” (Joined Cases T-383/06 and T-71/07 Icuna.Com SCRL v Parliament [60]).