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Implications for Bidders as UK Government scraps BSF

  • Press Releases 8 July 2010 8 July 2010

On 5 July the Government announced it had scrapped all 58 Building Schools for the Future schemes that have not reached financial close.

This will hit contractors and members of consortia who have been bidding for such contracts, particularly preferred bidders, as well as the authorities concerned, all of whom have engaged in lengthy and expensive tendering processes.

Whether bidders have any redress will depend very much on the facts of their case, such as how advanced a stage the award procedure has reached, the conduct of and instructions issued by the authority, and the terms under which the tenders have been conducted. Although parties affected will not want to waste more time and resources (over and above those devoted to the tenders they have lost) pursuing cases which prove fruitless , consideration should still be given as to whether there is any basis for an action seeking reparation for the costs of bidding or the losses suffered.

Courts in the UK have previously made awards of damages for bid costs or losses of profits to contractors who have sustained loss as a result of breaches of the procurement rules, or in relation to tender procedures, where they have decided that contractors ought to be compensated or to have their costs reimbursed.

Another alternative to explore is whether the relevant authority intends to proceed with their school project, albeit at a later date, and if so, whether the full application of the EU procurement rules can be avoided a second time around. There may be scope under these rules, for example, for authorities to invite original bidders to re-bid for contract works.

For advice on any of these issues please contact John Milligan, Anthony Albertini or your usual contact at Clyde & Co.