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New legal rights to challenge Australian Government procurements passed into law

23 October 2018

#Construction & Infrastructure, #Procurement

Scott Alden

Published by Scott Alden, Victoria Gordon, Julia Wyatt

New legal rights to challenge Australian Government procurements passed into law

In a significant step for Australian procurement laws, the Government Procurement (Judicial Review) Bill 2017 (Cth) (the Bill) passed the Senate without amendment on 18 October 2018.

The Government Procurement (Judicial Review) Act 2018 (Cth) (the Act) (once commenced) will provide suppliers with a statutory platform to challenge a government procurement process in the Federal Court of Australia (FCA) or Federal Circuit Court of Australia (FCCA) for a breach of the Commonwealth Procurement Rules (CPRs). 

Overview 

Set out below is a snapshot of the Act. For more detail please refer to our previous article on the Bill here.

The Act:

  • will commence six months after assent (being 20 April 2019) or earlier by proclamation
  • only applies to ‘covered procurements’ (where Divisions 1 and 2 of the CPRs apply, the procurement is not exempt under Division 2 and the procurement meets the relevant monetary threshold)
  • only applies to alleged breaches that occur after the Act’s commencement date. Importantly, procurement processes already on foot are caught if the alleged breach occurs after the commencement date
  • gives the FCA or FCCA the power to grant two key remedies for a contravention of the relevant CPRs, being: 
    • injunctions
    • compensation 
  • provides a ‘public interest certificate’ mechanism for government procuring entities to resist an injunction in certain circumstances 
  • imposes additional obligations on procuring entities to investigate complaints and suspend a procurement pending an investigation (where there is no public interest certificate in force).

Remedies under the Act 

The remedies under the Act are only available after a complaint is first made to the procuring entity and an internal review process of that complaint has been undertaken.

Following the review, upon application to the FCCA or FCA, a tenderer may obtain the following injunctions against a government procuring entity:

  • a restraining injunction - to prohibit conduct that contravenes the CPRs, or
  • a performance injunction - to require a procuring entity to do something to ensure compliance with the CPRs.

An application for an injunction must be made within 10 days of the alleged breach of the CPRs (unless an extension of time has been obtained). 

A ‘public interest certificate’ may be issued where an injunction would cause significant delay to a procurement process. If a public interest certificate is in force, and a contract has not yet been awarded, the court may refuse an injunction in favour of an order of compensation.

Compensation under the Act is limited to reasonable costs in preparing a tender, lodging a complaint, or attempting to resolve the complaint, and does not include loss of profit.

Existing remedies 

Existing remedies are not limited by the Act and continue to be available to tenderers, including: 

  • damages for a breach of ‘process contract’ claim (including for loss of profit or loss of chance)
  • equitable remedies for equitable estoppel (for example an injunction, order for specific performance or damages in equity) 
  • compensation for misleading and deceptive conduct under the Australian Consumer Law (where applicable in respect of Government procurement)
  • damages for misrepresentation at common law
  • judicial review of the procurement decision under administrative law. 

Next steps for government entities

The Act is now law and will commence within the next six months. 

Government procurement entities need to:

  • review all current and upcoming procurements to determines if they are caught by the Act 
  • carefully monitor the commencement date of the Act 
  • review internal processes and tender documentation to ensure compliance with the CPRs and internal review processes for dealing with tenderer complaints 
  • consider where a public interest certificate may be required for current or upcoming procurements. 

Authors: Scott Alden, Victoria Gordon & Julia Wyatt

Contacts:
Sydney
Scott Alden, Partner 
T: +61 2 8083 0419 
E: scott.alden@holdingredlich.com

Christine Jones, Partner 
T: +61 2 8083 0477 
E: christine.jones@holdingredlich.com

Helena Golovanoff, Partner 
T: +61 2 8083 0443 
E: helena.golovanoff@holdingredlich.com

Brisbane
Troy Lewis, Partner & National Head of Construction and Infrastructure 
T: +61 7 3135 0614 
E: troy.lewis@holdingredlich.com

Stephen Burton, Partner 
T: +61 7 3135 0604 
E: stephen.burton@holdingredlich.com

Suzy Cairney, Partner 
T: +61 7 3135 0684 
E: suzy.cairney@holdingredlich.com

Melbourne
Stephen Natoli, Partner 
T: +61 3 9321 9796 
E: stephen.natoli@holdingredlich.com

Kyle Siebel, Partner 
T: +61 3 9321 9877 
E: kyle.siebel@holdingredlich.com

Disclaimer
The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this publication is accurate at the date it is received or that it will continue to be accurate in the future. We are not responsible for the information of any source to which a link is provided or reference is made and exclude all liability in connection with use of these sources.

Scott Alden

Published by Scott Alden, Victoria Gordon, Julia Wyatt

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