There may be trouble ahead! How to manage legal challenges effectively

For many organisations, the last thing they want to consider when starting a procurement process or entering into a contract is how this can go wrong. However, as a specialist in contract and procurement disputes, I see how quickly disputes can escalate and how the early steps taken are fundamental to mitigating the time and cost expended in resolving the situation.

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Procurement Disputes

Although potential for challenge is wide ranging, difficulties tend to arise over things such as a failure to follow the process in the tender documents, how responses are evaluated / scored and breach of the overarching treaty principles relating to transparency, equal treatment and non-discrimination.

To reduce the risk of challenge it is important to plan your procurement and draft the documents carefully. In particular, ensure:

  • you have the right to abandon or re-run the process at any stage for any reason without any right of the bidders to claim their costs;
  • the team running the procurement is properly briefed; and
  • those undertaking the evaluation are provided with the necessary information to evaluate in accordance with the issued documents.

During the process, keep contemporaneous records and refer back to the original documents. Where clarifications are raised, respond to these in accordance with the issued documents. If a clear breach can be established, don’t be afraid to issue new documents or re-run parts of the process where this is necessary.

Taking early steps will minimise the potential for challenge and give the contracting authority better tools to address and defend any challenges that arise.

Where a challenge does arise, the time limits for bringing a claim are strict. A disappointed tenderer generally has thirty days from when they knew, or ought to have known that grounds had arisen to issue a claim at court. The strict time limits mean that challengers may already be out of time when a process is challenged. Where possible, a contracting authority should be careful not to issue further information which may restart the time for bringing the claim. Early advice should always be sought to ensure that the necessary steps can be taken.

Contract Disputes

Considerable skill is involved in effectively managing and avoiding disputes which inevitably arise from time to time. The causes of disputes arising are many and far reaching, although ultimately, they boil down to time and cost!

Once a contract has been entered, it’s easy to set this document aside and only pick it up again once a dispute has arisen. One of the most fundamental steps to avoid and mitigate disputes under a contract is to know your contract and apply it. If there are changes to the contract that become necessary as a relationship progresses, properly record these in writing and get them signed by the parties. This will avoid arguments at a later stage about what terms apply.

Ensure that a professional relationship is maintained and that the team managing the contract is properly briefed and understands the contract procedures. If the team changes, consider additional training to ensure that the new team members are up to speed. It is also important to make sure that records are properly maintained and kept up to date.

There can be many signs that a dispute under a contract is arising, such as unfulfilled promises, complaints, delayed responses and so on. It seems simple to ignore these initial warning signs because of a desire to keep the works or services progressing and to avoid unnecessary disruption. However, ignoring the warning signs can mean that a dispute escalates and ultimately results in increased time and costs.

Problems are bound to crop up from time to time, but taking appropriate steps at an early stage will minimise the potential of a dispute growing. The good news is that even if a serious dispute does arise, with the right advice, it is possible to use tools such as mediation, to resolve these quickly and cost effectively.

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