Procurement Law Update: The Deadline is Key
The High Court in Ireland dismissed an out of time challenge by an applicant building company to a decision by a respondent City Council to exclude it from a competition for a contract to build social housing.
In Glenman Corporation Limited v Galway City Council  IEHC 336, the applicant started building works under a 2019 contract but, when considerable delays arose, the contract was terminated in 2022.
The applicant disputed contract termination and the matter was referred for conciliation. The conciliator upheld the decision to terminate. The applicant filed a Notice of Dissatisfaction with the conciliator’s Recommendation.
The respondent advertised a new call for tenders to complete the remaining 80% of the works. The applicant completed a Suitability Assessment Questionnaire (“SAQ”) in this new process, in which it indicated that it had had a public contract terminated early, although the matter was subject to ongoing dispute resolution.
The respondent issued a decision excluding the applicant from the new tender process. It relied on the statutory provision that allows for exclusion where an economic operator has shown significant or persistent deficiencies in the performance of a substantive requirement under a prior public contract, which led to early termination of the prior contract.
In its decision, the respondent referenced the applicant’s SAQ answers and stated that the validity of the contract termination was also confirmed by the conciliator’s Recommendation.
The applicant applied for judicial review of the decision to exclude it from the new tender process. However, it applied around 60 days after expiry of time-limit. Its explanation to the Court was that the decision contained a reference to the conciliator’s Recommendation. It argued that issuing proceedings exhibiting this “without prejudice” document would have put it in abuse of process.
Time-Limit to Challenge Judicial Review Proceedings
Procurement law requires that applications to Court are made within 30 calendar days after the applicant is notified of the decision, or knew or ought to have known of the infringement alleged.
Under Court rules, the Court can permit the issue of out of time proceedings if it considers there is good reason to do so.
The Court noted the place of public procurement law as being a specialist area of judicial review, in respect of which an essential feature is a requirement for urgency and rapidity in bringing challenges.
The Court’s Decision
The applicant failed to respond rapidly and urgently when it believed a decision was unlawful.
The Court did not accept there was a good and sufficient reason to grant leave to challenge the award after the deadline. Key points of the decision are set out below.
- There is a public interest in ensuring that public contracts are not subject to endless challenges in the courts, so the Courts should strictly enforce the time-limit and carefully scrutinise applications for derogations from the time-limit.
- The test for what counts as good and sufficient reason for permitting the late issue of proceedings is more demanding than the test for allowing amendment of proceedings. There is a significant difference in the legal consequence of the issue of proceedings and amendment of proceedings already issued. This is particularly so in procurement challenges, where the issue of legal proceedings is a powerful tool leading to the automatic suspension of public contracts.
- There was risk of confirmation bias (ex post facto justification) in this case. Nowhere in the contemporaneous evidence had the applicant objected to mention of the Recommendation on the basis that it was a “without prejudice” document. It had described it as confidential.
- In considering whether evidence is subject to confirmation bias, the Court “should scrutinise with particular care explanations advanced” for the delay. Initial correspondence was concerned with asking the respondent to reconsider its decision and engaging in legal argument about the status of the ‘confidential’ Recommendation. The respondent indicated it would not re-issue the decision. Despite knowing that the deadline was fast approaching, and despite having all the information it needed to issue the proceedings, the applicant let the deadline pass. When it applied for judicial review, it did not pursue any special arrangements to, for example, redact the reference to the Recommendation.
- The commercial nature of the dispute was relevant. It involved a high value contract. It could be expected that the applicant was well resourced, had legal advice, knew there was a tight deadline which would be strictly enforced, and was of the means to organise its affairs to bring litigation rapidly. Yet it chose to wait circa two months after the time limit to issue proceedings.
The Court summarised the applicable legal principles as follows:“… the quid pro quo for being given the extremely powerful legal tool of being able to bring a multi-million public contract to build critical infrastructure … to a shuddering halt, by the simple expedient of issuing proceedings, which could have a negative impact upon the public interest, regardless of the merits of those proceedings, and without any court oversight is, firstly, that there is a very tight deadline, secondly, that the deadline is strictly enforced and, thirdly, that the reasons for an exemption are very carefully scrutinised.”
Lest there be any remaining doubt, Courts treat the time limit for bringing procurement challenges strictly.