04 July 2013

Challenging the procurement proceedings before the Independent Revenue Panel

This article covers the circumstances when a challenge to a recent or imminent procurement decision under the Public Procurement Act (“PPA”) can be made before the Independent Review Panel (“IRP”). The expression “procurement proceedings” is not defined in the PPA. It is understood that the legislator intended the expression “procurement proceedings” to mean proceedings engaged in or measures taken by a public body to enter into a procurement contract.

What is public procurement?

Public procurement is the purchase of goods, works, consultant services or other services by Government and other public bodies.

Who must comply with the PPA?

The Government and other public bodies must comply with the PPA when contemplating the procurement of goods, works, consultant services or other services, unless the exceptions provided for in section 3 of the PPA applies. An example of a public body is a local authority or an entity specified in the Schedule to the PPA (e.g., State Informatics Ltd.).

Challenging the procurement proceedings

A bidder may challenge the procurement proceedings to the Chief Executive Officer of the public body concerned at any time before the entry into force of the procurement contract. Bidders should be aware of the pre-conditions which the Act imposes before a challenge can be entertained, namely:

  • the bidder must have suffered loss or injury, or the bidder is likely to suffer loss or injury; or
  • the loss or injury must be due to a breach of a duty imposed on the public body or the Central Procurement Board (”CPB”) under the PPA.

Right of review before the IRP

An unsatisfied bidder may request the IRP to review the procurement proceedings in the following circumstances:

  • the Chief Executive Officer of the public body does not issue a decision within the time specified period of 7 days (section 45(1) of the PPA and regulation 48(4) and (5) of the PPR);
  • the bidder is not satisfied with the decision of the Chief Executive Officer;
  • before or after the entry into force of a procurement contract the value of which is above the prescribed threshold, if the bidder  has suffered, or is likely to suffer, loss or injury due to a breach of a duty imposed on a public body or the CPB by the PPA.

Delay to file an application before the IRP

An application for the review of the decision of the public body must be filed within 7 days of receipt of the decision of the public body or the time when that decision should have been received by the bidder (regulation 48(5) of PPR).

Requirement of deposit to prosecute application for review

An application for review before the IRP must be accompanied by a deposit (section 45(3) of the PPA and regulation 51(1) of the PPR) of:

  • 100,000 rupees where the application relates to the bid opening process or the award of a major contract (a major contract is a contract for the procurement of goods or services or the execution of works to which a public body is or proposes to be a party and the estimate of the fair and reasonable value of the procurement exceeds the amount stated in the Schedule to the PPA);
  • 25,000 rupees in any other case.

A non-refundable processing fee of 5,000 rupees must also be paid when then application for review is lodged.

This deposit is liable to be forfeited by the IRP if it considers that the application for review was frivolous.

Effect of an application for review

The procurement proceedings are suspended until the IRP has heard and given its determination on the application (section 45(4) of the PPA). However, if the public body whose decision is being disputed certifies in writing that public interests considerations require the procurement proceedings to proceed, the procurement proceedings are not suspended (section 45 (5) of the PPA).

Powers of the IRP when seized with an application

  • Dismissing the application where, e.g., there is a failure on the applicant to comply with any of the requirements of sections 43 to 45 of the PPA, and the PPR (regulation 56 of the PPR);
  • Requesting the public body to make available to the IRP any information or documentation (regulation 53 of the PPR); for example:

(i) the bid or proposal submitted by the applicant;
(ii) the bid or proposal of the bidder that is being considered for award, or whose bid or proposal is being reviewed;
(iii) all qualification assessment and evaluation documents;

  • Conducting a hearing at the request of the applicant for review or on its own initiative, where it deems appropriate, (regulation 57 of the PPR);
  • Ordering one or more of the following remedies (section 45(1) of the PPA):
  • prohibiting the public body from acting or deciding in an unauthorised manner or from following an incorrect procedure;
  • recommending the annulment in whole or in part of any unauthorised act or decision of the public body;
  • recommending a re-evaluation of the bids or a review of the decision for an award, specifying the grounds for such recommendation; or
  • recommending payment of reasonable costs incurred in participating in the bidding process where a legally binding contract has been awarded which, in the opinion of the Review Panel, should have been awarded to the applicant.

Conclusion

A bidder who contemplates an application for review before the IRP must in the first place, ensure that it complies with the provisions of the PPA regarding delays and challenges. When preparing the application for review, the bidder must consider carefully the grounds for review, any special relief(s) to be sought, whilst at the same time not losing sight of the commercial objectives underpinning the application for review. Specialist advice is, therefore, necessary.

Juristconsult Chambers