Introduction

The case of Lancashire County Council v Brookhouse Group Ltd ([2024] EWCA Civ 717) addresses a significant dispute under the Public Contracts Regulations 2015 (PCR15). The central issue revolves around the applicable time limits for initiating legal proceedings concerning the procurement process. Brookhouse Group Ltd ("Brookhouse") challenged Lancashire County Council's ("the Council") decision to award a Development Agreement (DA) directly to a subsidiary of Eric Wright Group Limited ("EWG") without a public competition, arguing that the short time limit of 30 days should apply instead of the standard six-month period. This case is particularly notable as Brookhouse, while contesting the Council's actions, is not recognized by the Council as a public contract covered by PCR15, leading to a complex legal battle over the interpretation and application of procurement regulations.

Summary of the Judgment

The England and Wales Court of Appeal dismissed Lancashire County Council's appeal, upholding the lower court's decision to strike out the Council's defense based on Regulation 93(2)(a) of the PCR15. The Court determined that the Council failed to provide a Contract Award Notice, which would have reduced the time limit for Brookhouse to initiate proceedings from six months to 30 days. Consequently, the longer six-month period was applicable, and the Council's application to strike out Brookhouse's claim was incorrectly based on an improper interpretation of the regulations.

Analysis

Precedents Cited

The judgment extensively references prior cases and interpretations of the PCR15 to establish the boundaries of the applicable time limits. Notably:

• International Game Technology PLC v Gambling Commission [2023]: Provided foundational explanations of the PCR15 framework.
• Sita UK Ltd v Greater Manchester Waste Disposal Authority [2011]: Affirmed the necessity for economic operators to have a real likelihood of success to trigger time limits.
• Alstom Transport v Eurostar International Limited & Anr [2011]: Distinguished as dealing with distinct circumstances where public competitions were held.

These references underscore the court's reliance on established interpretations of procurement law to resolve the dispute.

Legal Reasoning

The Court meticulously dissected the interplay between Regulations 55, 93, and 99 of the PCR15. The key aspects of the legal reasoning include:

• Regulation 93(2)(a): Pertains to the reduction of the time limit to 30 days if a Contract Award Notice is published. The Court found that since the Council did not publish such a notice, the shorter time limit was not triggered.
• Regulation 55(2): Requires contracting authorities to provide specific reasons for decisions not to award contracts. The Court emphasized that these reasons are intended for unsuccessful candidates or tenderers who participated in a competition, not for situations with no competition.
• Regulation 99: Governs the grounds for declaring a contract ineffective. The Court clarified that Brookhouse's claim fell under the first ground, which did not apply the shortened time limit due to the absence of a Contract Award Notice.

The Court rejected the Council's arguments to extend the applicability of the 30-day limit by misinterpreting the regulations to cover hypothetical or non-participatory economic operators.

Impact

This judgment sets a critical precedent for public procurement proceedings in the UK, particularly concerning time limits for initiating legal challenges. It reinforces the necessity for contracting authorities to adhere strictly to the procedural requirements set out in the PCR15. Failure to publish a Contract Award Notice when directly awarding contracts without competition solidifies the longer six-month period for claims, potentially granting more leeway for economic operators like Brookhouse to contest decisions.

Moreover, the decision underscores the importance of transparency and fairness in public procurement, discouraging authorities from circumventing competitive processes to favor specific contractors without justifiable reasoning.

Complex Concepts Simplified

Public Contracts Regulations 2015 (PCR15)

PCR15 governs the procedures for public sector procurement in the UK, ensuring transparency, fairness, and competition. It sets out rules for how public contracts should be advertised, how bids are evaluated, and how contracts are awarded.

Economic Operator

An economic operator is any individual or entity that offers to execute works, supply products, or provide services in the public market. This includes companies, partnerships, and sometimes, groups of these entities.

Regulation 93(2)(a) Time Limit

This regulation specifies that if a contracting authority publishes a Contract Award Notice, the time frame for challenging the contract award is limited to 30 days from the date of publication. This is shorter than the standard six-month period.

Declaration of Ineffectiveness

A legal declaration that a contract was awarded improperly, violating specific procurement regulations, thereby rendering the contract void.

Conclusion

The appellate decision in Lancashire County Council v Brookhouse Group Ltd reaffirms the strict adherence required by public authorities to the established procurement regulations. By maintaining that the absence of a Contract Award Notice precludes the application of the shortened 30-day time limit, the Court emphasized the necessity for transparency and procedural compliance in public contract awards. This judgment not only vindicates Brookhouse's standing in challenging the direct award but also serves as a deterrent against arbitrary procurement practices, ensuring that economic operators retain their right to contest unfair or opaque contracting decisions within a reasonable timeframe.