Using direct awards when requirements are extremely urgent

With the government being sued over the ferry capacity procurement, it’s worth looking at the rules surrounding above-threshold requirements that are too urgent to tender. The government believed they had to acquire the capacity urgently and decided to use the Negotiated Procedure without Prior Publication. Did they have that right? Is it applicable for your procurement?

Can we make a direct award if our requirement is extremely urgent?

You can, but only in very specific circumstances. Regulation 32 of the Public Contracts Regulations 2015 makes provision for Contracting Authorities to make a direct award by using the Negotiated Procedure without Prior Publication.

When are we allowed to use the Negotiated Procedure without Prior Publication?

Under Regulation 32, there are three main scenarios where this is permitted:

  • Where no acceptable responses are received to an Open or Restricted Procedure
  • Where the works, services or goods can only be supplied by one economic operator (such as works of art)
  • Where there is ‘extreme urgency’

What are the tests for ‘extreme urgency’?

Extreme urgency is the reason given by the government in the ferry procurement. But simply having an urgent requirement is not sufficient. There are three tests Contracting Authorities must meet:

  • The requirement must be ‘strictly necessary’.
  • The events that created the urgent need must have been ‘unforeseeable’. This is a test the government may fail to meet. How, the courts may ask, could you not have foreseen the need for this ferry capacity given how long you have known Brexit was going to happen? It seems clear that the requirement could have been foreseen. The emphasis here is not whether you did foresee the requirement, but whether you could have foreseen it.
  • The reasons for the urgency must not ‘in any event’ be attributable to the Contracting Authority? In the case of the ferry capacity procurement, the government may try to argue that they had not foreseen that no-deal might be an option, hence the extreme urgency. But the courts may well come to the conclusion that the government had a part to play in the fact that no deal had become an option. If that were the case, then the government would in breach of the regulations.

What happen if we use a direct award improperly?

With the option to run an urgent procedure in 15 days, the courts have little sympathy with Contracting Authorities that improperly make a direct award. There are a range of legal remedies if challenged, including cancellation of the contract by the courts up to six months after it has been awarded.

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