A summary of Lancashire County Council v Brookhouse Group Limited

Background

When challenging an award and seeking a declaration of ineffectiveness, Regulation 93(2) of the Public Contracts Regulations 2015 ("PCR 2015") provides that proceedings must be started within:

• 30 days, beginning with the day after the date on which (i) a relevant contract award notice has been published, or (ii) the contracting authority has informed the candidate or tenderer of the conclusion of the contract and provided a summary of the relevant reasons why it was unsuccessful, which they would have been entitled to receive in response to a request pursuant to Regulation 55(2) of the PCR 2015; or
• 6 months, beginning with the day after the date on which the contract was entered into.

The Court of Appeal ("the CoA") was asked to consider the decision made by the Technology and Construction Court ("TCC") in Brookhouse Group Ltd v Lancashire County Council [2023] EWHC 2921 (TCC) that where a contracting authority has not carried out a competitive tender process, the 30 day time limit does not apply and the limitation period is 6 months.

Facts

Lancashire County Council ("Lancashire CC") awarded and entered into a public works contract with a developer. There was no competitive tender process and no contract award notice was issued.

Lancashire CC notified Brookhouse Group Limited ("Brookhouse") that it had entered into the contract and, by way of response to a Letter of Claim from Brookhouse, it subsequently confirmed the conclusion of the contract and provided a detailed summary of the reasons why it was entitled to enter into the contract without conducting a competitive tender process.

Within 4 months, Brookhouse brought a claim against Lancashire CC challenging the award and seeking a declaration of ineffectiveness. Lancashire CC defended the claim on the basis that Brookhouse had been informed of the conclusion of the contract and provided with a summary of the "relevant reasons" by its response to the Letter of Claim such that the claim should have been brought within 30 days.

Issues

The CoA was asked to consider the TCC's decision that:

1. Where a contracting authority has not carried out a competitive tender process, the 30 day time limit does not apply and the limitation period is 6 months; and
2. Lancashire CC had not provided Brookhouse with a summary of the "relevant reasons"  in accordance with the Regulation 55(2) of the PCR 2015 (again meaning the 30 day time limit does not apply) which requires:
   • A contract being awarded pursuant to a competitive tender process;
   • A "candidate" or "tenderer" (as defined in the PCR 2015) having requested reasons;
   • The reasons requested relating to one of the specific four matters specified in Regulation 55(2);
   • The reasons having been provided (which starts time running for the purposes of limitation).

Judgment

The CoA clarified that economic operators have 6 months to start proceedings:

• If there has been no prior publication of a contract notice, however, the contracting authority can reduce this to 30 days if it publishes a contract award notice;
• If a contracting authority has entered into a contract despite the operation of a standstill period or automatic suspension (which presumes that there has been a competitive tender process), however, the contracting authority can reduce this to 30 days if it (i) informs the economic operator about the conclusion of the contract, and (ii) provides a summary of the relevant reasons.

The appeal by Lancashire CC was dismissed on the basis that:

1. In the absence of a competitive tender process, Brookhouse had 6 months to start proceedings;
2. Lancashire CC could have reduced the limitation period to 30 days had it published a contract award notice, but it chose not to so as not to alert other economic operators (the CoA considered that Lancashire CC was in breach of its obligations of transparency, fairness and the requirement to treat each economic operator equally by only informing Brookhouse of the contract award);
3. Providing a summary of the relevant reasons ordinarily occurs upon the request of a candidate or tenderer, although contracting authorities can provide this information voluntarily to reduce the limitation period from 6 months to 30 days in the particular circumstances set out above. This does not apply where there hasn’t been a competitive tender process;
4. Providing a summary of the relevant reasons is about why a candidate or tenderer has been unsuccessful in a competitive tender process; it is not about why there hasn't been a competitive tender process.

Comment

This is a helpful decision for economic operators and contracting authorities alike, clarifying that there is a 6 month time limit to challenge an award and seek a declaration of ineffectiveness where there is no competitive tender process, which the contracting authority can reduce to 30 days if it publishes a contract award notice.

For economic operators, the judgment is a welcome reminder of the limitation periods for starting proceedings to challenge an award and seek a declaration of ineffectiveness. For authorities, the judgment clearly sets out what they must do to reduce the limitation period from 6 months to 30 days in certain circumstances, and it reinforces the importance of transparency and equal treatment when conducting a procurement.

A copy of the judgment can be found here: Lancashire County Council v Brookhouse Group Limited [2024] EWCA Civ 717 (28 June 2024) (bailii.org).