First Declaration of Ineffectiveness Made in the UK
The Scottish Court has recently ruled that a call-off contract awarded under a framework agreement should be declared ineffective.
Inverclyde Council awarded the contract to Amey Public Services LLP, which was not a party to the framework agreement. It was in fact the Contractor's group company, Amey OW Limited, which was a party to the framework agreement.
The court determined that the award to a different party was not a clerical error that could be remedied, but rather that the Council had proceeded on the mistaken basis that the subsidiary was a party to the framework agreement. The court considered the contract was an illegal direct award, without advertisement or a prior information notice and made a declaration of ineffectiveness.
The court was not persuaded that the principle of proportionality can limit the entitlement of an economic operator to challenge an alleged breach of duty to comply with procurement legislation or where a contacting authority has failed to act within it statutory powers.
(Case: Lightways (Contractors) Limited v Inverclyde Council [2015] CSOH 169, 1 December 2015).
Comment
This case is the first time that a UK court has declared a contract or framework call-off as ineffective and serves as a reminder of the potential consequences of mistakes or errors when procuring via framework agreements and the draconian sanction of ineffectiveness.