Clients and contractors may be obliged to divulge tendering data that could leave them open to legal challenges.
Clients and contractors face legal challenges if documents obtained under the Freedom of Information Act reveal unfair bidding practices, legal experts have warned.
Under the act, which came into force on 1 January, data submitted by firms to pre-qualify for public sector work must be disclosed on request. Companies will be able to obtain information about rivals’ bids within 20 working days of requesting it. They could then compare that with their own tender and the selection criteria to determine whether the procurement process had been fair.
Rudi Klein, a barrister specialising in construction, said: “It’s likely that companies will want information on previous contract awards, particularly in framework agreements such as Procure21. A disgruntled contractor will want information on why a rival firm got the work.”
Subcontractors could also benefit from the act. If a specialist loses out, and later finds evidence that its prices or designs were used without its knowledge, it could could claim for breach of implied contract.
Firms can also use the act to obtain commercially sensitive information about their rivals, and vice versa. Rosemary Jay, a lawyer at Pinsent Masons, said that the implications for firms on PFI and PPP contracts went beyond tendering and procurement issues. She said: “A big contract in which a firm builds and provides services creates a huge amount of information about the site, the safety record, the impact on the environment, the way the contract is run and so on. All of that will come under the act.”
A spokesperson for the Construction Confederation said it had concerns over the protection of this information but that the act had yet to be tested. He said: “We are aware that the act is a double-edged sword. It could be a tool to be embraced, but we need to see its practical application.”
Klein said most firms had not thought through the consequences of the act. He said: “They need to think carefully about the amount of information they reveal.”