Passport Procurement - What Next?

16 April 2018

Author: Kerry Teahan
Practice Area: EU and Competition, Procurement Law
Sector: Brexit

Passport_image

A complaint regarding the Home Office’s decision to award a £490 million contract for UK passport production to Netherlands based company Gemalto, has raised some interesting questions about the potential future of public procurement in a post-Brexit Britain.

The incumbent supplier, British company De La Rue, publicly questioned the decision and a media campaign was mobilised urging the Home Office to reverse the decision.

The government granted a two-week extension to the standstill period. The decision on the next step is due on Tuesday 17 April.

Procurement law experts at Carson McDowell have commented on the decision to allow a time extension:

“Following significant negative media coverage, outcry from prominent Brexiteers and the threat of a potential challenge from the incumbent, the Home Office granted a two week extension to the standstill period for the award of the contract.

“The standstill period is the term used to describe a 10 day period during which a contracting authority caught by the procurement rules (such as the Home Office) must wait before entering into the contract with the successful tenderer.

“Whilst the full facts of the claim are not yet in the public domain, the mere fact that the winning bidder is not based on the UK is not in itself a strong legal argument. The incumbent does not appear to be arguing that a breach of the UK (derived from EU) procurement laws has occurred. Instead, the incumbent seems to have simply argued for the moment that it submitted “the highest quality and technically most secure bid” and should have been awarded the contract.

“This is regardless of the fact that the successful bid, which will have been assessed on the basis of both quality and price at weightings pre-determined by the Home Office and published as part of the tender competition, is believed to represent a saving of up to £120 million for the UK public purse.

“Downing Street said the extension was granted to allow De La Rue to obtain more information about the tender process. This is an unusual stance for the Home Office to take as, in most cases, where the contracting authority is confident in its procurement process, it will more often proceed to enter into the contract, rather than engage in what could be seen as an exercise in placating a disgruntled bidder.

“While engaging in pre-action disclosure is encouraged, it is not usual to see such a significant extension to the standstill period granted if no significant breach of the Public Contracts Regulations 2015 has been alleged.

“The decision expected on Tuesday is eagerly anticipated by procurement professionals, purchasers and bidders alike. If, in the absence of a substantive complaint that the award breaches the procurement rules, there is a further commitment to review the decision or delay the award, then this will raise interesting questions about the future direction of public procurement law and policy and the equal treatment of EU and UK bidders in a post-Brexit Britain.”

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