contract is void where, for example, it has been awarded without an OJEU procedure or the requisite standstill procedure post award has not taken place – as well as fines. Contractors also have the right to bring actions for damages for wasted expenditure and/or loss of profit up to 30 days from the date of reasonable awareness of any breach. These rules, including in particular the rules on ineffectiveness, should be borne in mind where an authority agrees changes to a contract awarded (where these may be favourable to the contractor or are otherwise ‘material’), or renews an existing contract. The time limit for an action for ineffectiveness is generally six months from the date of the contract. There are notices – a ‘voluntary transparency notice’ or a ‘contract award notice’ – which may be placed in the OJEU to reduce the time limits for declarations of ineffectiveness to ten or 30 days respectively. There are also exceptions to the obligation to tender, and means of legitimately avoiding there being the award of a works contract within the meaning of the rules, which may be worth exploring.
One scenario where, in our experience, unexpected problems can arise, in the absence of any third party complaint, is where EU funding, such as ERDF funding, has been offered to an authority. In such cases, random audits are sometimes carried out (often several years after the funding has been granted) and claw-backs may be sought where irregularities, such as breach of the EU public procurement rules, are found. Particular care is required in such cases. John Milligan
Partner, Guildford T: +44 (0)20 7876 5451 E: john.milligan@clydeco.com
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