Government Procurement (Judicial Review) Bill 2017
The Government Procurement (Judicial Review) Bill 2017 (the Bill), which was initially proposed for the Spring sittings of Parliament last year, was introduced into Parliament on 25 May 2017.
As predicted, (see our Government Bulletin - summer edition here) the Bill (if passed) will significantly alter the legal landscape for tender challenges by providing suppliers a statutory platform to challenge government tenders for breach of the Commonwealth Procurement Rules (CPRs).
Overview of the Bill
The Bill (if passed) will grant the Federal Circuit Court of Australia (FCCA) and the Federal Court of Australia (FCA) the power to grant an injunction or order compensation for a contravention of the relevant CPRs, where the procurement is deemed a ‘covered procurement.’ A procurement is a ‘covered procurement’ if Division 1 (to the extent it is declared applicable for the purposes of the Bill) and Division 2 of the CPRs apply. The exemptions of Division 2 of the CPRs will remain in full effect, as will the relevant threshold amounts.
What remedies will be available?
The Bill will permit an aggrieved tenderer to apply to the FCCA or the FCA for an injunction or compensation for breach of the CPRs. These remedies will only be available under the Bill where the tenderer has first made a reasonable attempt to resolve the complaint through the procuring entity’s internal dispute process. Thereafter, the FFCA and the FCA may grant either:
Where an injunction would cause significant delay to a procurement process, the procuring entity may issue a “public interest certificate.’ If a “public interest certificate’ is validly in force, and a contract has not yet been awarded, the Court may refuse the injunction if it considers that the injunction would cause significant delay and an order of compensation is more appropriate.
The compensation available to tenderers under the Bill is limited to “reasonable expenditure incurred by the supplier’ in preparing a tender, lodging a complaint, or attempting to resolve the complaint, and does not include compensation for loss of profit.
Implications for procuring agencies - how to prepare
Apart from the statutory remedies available to tenderers, procuring entities should be aware of their obligations under the Bill to investigate complaints, and suspend a procurement (if there is no public interest certificate in force) whilst an investigation is on foot. Procuring entities should also note that contravention of the CPRs does not invalidate a contract for the purposes of the Bill.
Finally, procuring entities must be mindful that the current remedies available to disgruntled tenderers will not be limited by the Bill, as the Bill expressly states that the powers of the FCCA and the FCA to grant injunctions are additional to, not instead of, any other powers of the Court.
Prudent procuring agencies can start preparing for the implications of the Bill, which, if passed, will likely come into force late this year or early next, by:
Authors: Scott Alden & Victoria Gordon
Scott Alden, Partner
T: +61 2 8083 0419
Stephen Natoli, Partner
T: +61 3 9321 9796
Suzy Cairney, Partner
T: +61 7 3135 0684
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Published by Scott Alden, Victoria Gordon