Procurement Law Update - New Irish Remedies Regime for Concession Contracts

The European Union (Award of Concession Contracts) (Review Procedures) Regulations (S.I. No. 326 of 2017) (the Concessions Remedies Regulations) were published on 17 July 2017. The Concessions Remedies Regulations implement the parts of the Concessions Directive (Directive 2014/23/EU) which cover review procedures for breaches of the rules on concessions contracts into Irish law.

Procurement of Concessions

On 18 May 2017, the Concessions Directive was transposed into Irish law by the European Union (Award of Concession Contracts) Regulations 2017 (S.I. No. 203/2017) (the Concessions Regulations). These Regulations (deemed to apply from 18 April 2016) did not transpose Title IV of the Concessions Directive which dealt with remedies. The Concessions Remedies Regulations apply to all decisions by contracting authorities (and contracting entities) taken after 17 July 2017 in relation to the award of "reviewable concession contracts", regardless of when the relevant concession contract award procedure commenced.

A concessions contract is a contract where a public body entrusts the execution of works or the provision or management of services to an economic operator where the consideration for the contract consists in the right to exploit the works or services. In addition, the operating risk under the contract must transfer to the concessionaire. 

Replication of Remedies Regime for Public Contracts and Utilities Contracts

As expected, the provisions of the Concessions Remedies Regulations replicate those in the Public Contracts Remedies Regulations (S.I. 130/2010 as amended) and the Utilities Remedies Regulations (S.I. 131/2010 as amended). The review procedures for above-threshold (€5,225,000 excl. VAT) concession contracts in Ireland are now in line with those applicable to public contracts and utilities contracts. The Concessions Remedies Regulations introduce a mandatory standstill period of 14 calendar days (16 calendar days for non-electronic communication) for concessions contracts. The standstill notice must contain the identity of the successful tenderer, details of the exact standstill period applicable and a summary of the reasons for the decision.

Amendments to the Public Sector and Utilities Remedies Regulations

In addition to the publication of the Concessions Remedies Regulations, the Public Contracts Remedies Regulations and the Utilities Remedies Regulations have each been amended by two new statutory instruments, both published on 17 July 2017, namely;

These amending Regulations are designed to bring the principal 2010 Remedies Regulations for both public contracts and utilities contracts in line with the European Union (Award of Public Authority Contracts) Regulations 2016 (S.I. No. 284/2016) and the European Union (Award of Contracts by Utility Undertakings) Regulations 2016 (S.I. No. 286/2016) respectively. These amending Regulations do not change the substance of the current review procedures for public or utilities contracts in Ireland.

Obligation to provide reasons

The 2017 Regulations amending the Public Contracts Remedies Regulations confirm the existence of a two-step obligation on contracting authorities to provide reasons for their decisions.  A new Regulation 5A (inserted by Regulation 5 of S.I. No. 327/2017) provides that nothing in Regulation 5 or 6 of the 2010 Regulations affects Regulation 55, and in particular Regulation 55(2), of the Public Authorities Contracts Regulations 2016.

Regulations 5 and 6 of the Public Contracts Remedies Regulations (S.I. 130/2010 as amended) relate to the initial obligation on contracting authorities to provide a summary of the reasons for a decision in the standstill letter. Regulation 55(2) of the 2016 Regulations, titled "Informing candidates and tenderers", provides that a contracting authority shall, as soon as possible but no later than 15 days following the receipt of a request in writing from the candidate or tenderer concerned, inform:

(a) any unsuccessful candidate of the reasons for the rejection of its request to participate;

(b) any unsuccessful tenderer of the reasons for the rejection of its tender;

(c) any tenderer that has made an admissible tender of the characteristics and relative advantages of the tender selected as well as the name of the successful tenderer or the parties to the framework agreement;

(d) any tenderer that has made an admissible tender of the conduct and progress of negotiations and dialogue with tenderers.

Interestingly, an equivalent provision is not included in the amending Utilities Remedies Regulations (S.I. No. 328/2017), although similar obligations to those in Regulation 55(2) of the Public Authorities Contracts Regulations 2016 (S.I. No. 284/2016) (set out above) apply in respect of utilities contracts under Regulation 82(2) of the European Union (Award of Contracts by Utility Undertakings) Regulations 2016 (S.I. No. 286/2016).

Legislative Framework complete

In a statement accompanying the publication of the three new remedies regulations (available here), Minister of State for Public Procurement, Patrick O'Donovan TD, stated that the process of aligning the regulation of public procurement in Ireland with the reformed public procurement regime initiated in 2014 by the European Commission has now been completed. He added that these three regulations are the "final pieces" of the legislative framework governing public procurement.

While it is helpful that the legal position in respect of remedies for each of public contracts, utilities contracts and now concessions contracts has been updated in line with the 2014 reform of the EU procurement rules, a consolidated version of the remedies regulations would be welcomed by all interested parties. For public contracts and utilities contracts, interested parties will need to consult the 2010 regulations together with the 2015 amending statutory instruments (S.I. 192/2015 and S.I. 193/2015) and the 2017 amendments (S .I. No. 327/2017 and S .I. 328/2017).  

For further information, contact Anna-Marie Curran or any member of the EU, Competition & Procurement Group at A&L Goodbody.

Date Published: 21 Aug 2017