In 2003 Severn Trent Water Limited (STW) commenced its tendering process for the award of contracts for the maintenance, renewal and improvement of its reservoirs, pipelines, pumping stations, treatment plants and sewerage systems. The contract was a five year programme of considerable value, being somewhere in the region of £1.5-£2bn.
STW published a Qualifications Systems Notice in the Official Journal of the European Union (OJEU) setting out the qualification system for consideration as a contractor in accordance with the Utilities Contract Regulations 1996. These regulations relate to the opening up of procurement to community competition in the utilities sector. They contain provisions for appropriate review and enforcement procedures under national law of member states.
Holleran did not register as a possible contractor within the deadline contained in STW’s qualification system and sought an extension of time for its registration, which STW refused to grant.
As a result of STW’s refusal to extend the deadline, Holleran issued proceedings claiming the notice in the OJEU had been not been a bona fide call for competition as required by the Utilities Contract Regulations 1996, the potential contractors had not been treated fairly and equally and the selection criteria had been inappropriate and unreasonable which amounted to discrimination against the potential contractors including Holleran.
Regulation 32(4) requires proceedings to be brought “promptly and in any event within three months” from the date when grounds for the proceedings first arose, unless the court considers there is good reason to extend the period within which proceedings may be brought.
Holleran’s complaints in relation to the validity of Qualification Systems Notice, the selection criteria applied and the alleged discrimination against potential contractors were time-barred by the operation of the Regulation 32(4) three-month time limit. In any event, even if the three-month limit had not applied Judge Cooke stated that Holleran had not brought the proceedings “promptly”.
There was no reason why Holleran should have delayed and therefore it was not an appropriate case to grant an extension of time. Holleran’s claim was statute barred.
*Full case details
M. Holleran Ltd vs Severn Trent Water Ltd, 4 November 2004, Queens Bench Division, Commercial Court, judgment of Judge Cooke
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In the tendering and procurement processes there is a clear need to deal with complaints quickly as a claim for damages or the grant of an extension of time on a complex contracts process could cause considerable prejudice to the tendering or procuring party.
The decision highlights the importance of taking legal advice as soon as a party feels they have been unfairly treated in a process such as tendering for contracts, as delay in proceedings may prove fatal to the action even prior to the expiration of stated time limits.