A substantial change to a contract does not risk set aside for “ineffectiveness”

Procuring organisations who have to make substantial changes to a contract during an OJEU tender process can breathe a sigh of relief. The threat of that contract being set aside for “ineffectiveness” because the changed contract has not been “advertised in OJEU” has now been removed.

The scenario is this – a contract is advertised in OJEU and substantial changes are then made to that contract during the tender process. Does this mean that the original OJEU notice no longer applies because the contract being procured is no longer the one that was advertised?

“No,” said the High Court in a recent case*. The issue here was whether a substantial change to the contract from the one that was tendered meant that the changed contract had not been advertised. This would have made it an illegal direct award and liable to be set aside for “ineffectiveness” throughout the six-months after it is entered into.

The court said that to prevent a challenge for ineffectiveness the OJEU notice just had to be “capable of being related to the procedure and contract awarded”. The fact that there had been a substantial change did not mean that the revised contract had not been let “without prior publication of an OJEU notice”.

This is welcome news. But there is a sting in the tail. The substantial change could still result in a claim for damages, for example from a contractor who has been denied the opportunity to tender for the revised contract because it has not been advertised.

If there is time to start a new procurement, then the best option is usually to do so. Where there is no time to do this, the case provides welcome reassurance that the changed contract is not at risk of set-aside because it has not been “advertised in OJEU”.

*AEW Europe LLP v Basingstoke and Deane Borough Council [2019] EWHC 2050

For more information

Please contact Andrew Millross.

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