Legal challenges give buyers an Olympic headache

13 October 2011
So the government has ultimately decided to scrap the tender for the 2012 Olympic Stadium tenancy, and start a new one on different terms. An anonymous complaint to the European Commission - asking for an investigation into whether the preferred bid broke rules on state aid - was reported to be the final straw for the Department of Culture, Media and Sport (DCMS), which bemoaned the “legal paralysis” that has affected the tender. I was critical earlier this year about the behaviour of the bidders, and it is unfortunately rather predictable it has come to an end in this way. It is though, yet another reminder for public sector buyers of threat that legal action can pose to tender processes. With contract awards now automatically suspended once a challenge is initiated (thanks to the Remedies Directive), even restarting the process involves a trip to court. An illustration of the delays court proceedings can cause came in a judgment published this week. In 2008, a judge in Northern Ireland ruled an £800 million framework agreement broke procurement rules. At the time the judge said the delay would probably be “a matter of months rather than years”. The case finally ended up in the Northern Ireland appeal court at the end of September – more than four years after the tender process began in 2007. And ultimately, the contract was still cancelled.
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