The Government Procurement (Judicial Review) Bill 2017 was introduced into Federal Parliament on 24 May 2017, whereby suppliers (anyone who supplies, or could supply, goods or services)  “whose interests are effected”, can complain about breaches of some of the rules within the Commonwealth Procurement Rules (‘Rules’).

Tendering, as a concept, is the traditional method of getting competitive quotes for a one off design. The process aims to make the selection method transparent, public and ultimately to encourage competition (particularly with respect to costs).

In past, unsuccessful tenderers have been able to claim compensation from governments on the basis that a binding process contract has been formed (Cubic Transportation System Inc v State of New South Wales & 2 Ors [2002] NSWSC 656). For this reason many procuring parties generally exclude liability relating to what is commonly termed the “process contract” from the tendering process. This is most usually found within a request for tender which governs how the tender is to be conducted, submission dates, form of submissions, queries and changes and the like.  As such, there is little or no recourse for dissatisfied tenderers. An exception to this is with respect to reasonable costs incurred once a letter of intent has been issued. If work is undertaken due to a request in a letter of intent, then payment may be claimed for reasonable remuneration (British Steel Corporation v Cleveland Bridge & Engineering Co Ltd (1981 24 BLR 94)). Generally, however, no claim can be made for breach of contract since there is no contract.

However, consultants whose interests are affected and who are involved with “covered procurements” under the Rules (a potentially wide group and is not necessarily restricted to potential bidders in the Commonwealth procurement) may also soon have recourse and the ability to make a complaint, and seek from federal courts an injunction to the process as well as reasonable compensation relating to the procurement process if a breach of the Rules is found.

If a complaint is made, the procurement process must stop, unless a public interest certificate is issued.

For consultants affected, this is something to consider when tendering with Commonwealth entities and if in a circumstance to complain, seek legal advice.

Felicity Jools

Risk Manager