UK Update: Fast Friends – Procurers and frameworks

The competing demands on a procurement professional often require a careful balance: the pressing business needs of the contracting authority (which generally comes with a large dose of time pressure) are set in the context of a regime that demands clarity of process and expects the timescales of that process to reflect the complexity of the procurement. Procurement lawyers like me add our voice to the balancing act: time spent getting your procurement right at the beginning saves you time (and mitigates risk) later!

The Friendship of the Framework

So, the go-to, steadfast, friend of the procurement professional has been for many years now the framework agreement, offering authorities entitled to use it an efficient AND compliant route to awarding contracts without conducting a standalone procurement for each and every purchase, since the necessary competitive process has already been done. Ideal!

But what if, from time to time, framework agreements – particularly the multi-buyer, multi-supplier kind – are used not first and foremost as a means to efficient compliance, but as a mechanism to award to a favoured supplier? The procurement regulations are crystal clear: “A contracting authority must not design a procurement or design contest with the intention of excluding it from the application of these Regulations or of artificially narrowing competition.”

Using a framework with a particular supplier in mind would undoubtedly fall into this prohibition. Yet it is a difficult argument for aggrieved would-be-bidders to sustain: authorities have discretion to utilise frameworks available to them – they are under no duty to conduct a standalone procurement as an alternative to a framework. And if a particular supplier loses out because they are not on a particular framework, that loss isn’t actionable against a contracting authority that chooses to use it, is it?

In fact, it might be.

Improper use of a framework

One of the several interesting conclusions coming out of the recent judgement in Consultant Connect Limited v NHS Care Boards is that if a framework is improperly used (and in this case, the court found that a framework had been used by the NHS Care Boards to effect a direct award to a favoured supplier), the fact that a supplier is not on the framework is not a barrier to legal action.

Arguments were made for the NHS Care Boards on this point: suppliers not on a framework are lawfully excluded from bidding in a call-off scenario – they have no interest in the operation of the framework.

But the court reasoned that “if the entire exercise is carried out within the four corners of a framework agreement, the parties most likely to be prejudiced and in a position to claim are disappointed framework members” so it is “necessary to examine the manner in which the procurement was carried out” to determine whether a supplier’s non-membership of the framework is fatal to their claim.

In other words, if a framework is improperly used, the risk cannot be said to be contained to those suppliers on the framework; others may risk suffering loss and may raise proceedings accordingly (especially, as was the case with the claimant, Consultant Connect, if there is an existing incumbent relationship with the procuring authority).

A number of issues were raised as indicators of improper use here: the “winner” had already been selected through “market engagement” in which Consultant Connect participated, involving a technical demonstration that was subject to undisclosed scoring; the requirements were tailored to a particular supplier; and there was evidence of organisational bias in favour of a particular supplier.

So, procurement professionals take care. The friendship of a framework must be shielded from improper use. A favourite supplier may be a tricky reality that requires careful management, but as the court said in this case: “the principle breached was nothing less than that of fair competition. It could not be more important”.

By Burness Paull LLP, Scotland, a Transatlantic Law International Affiliated Firm.  

For further information or for any assistance please contact ukscotland@transatlanticlaw.com

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