The Alcatel standstill period: a silver bullet for contracting authorities?
Following the appointment of a preferred bidder, contracting authorities must allow at least 10 days between the notification of the contract award and the signing of the contract. The reasoning behind this 10 day wait (known as the standstill period) is to give the unsuccessful bidders a chance to seek remedies (e.g. damages) if they believe the procurement process has been defective in a way that has prejudiced them.
It is often anticipated that all challenges to a procurement will come out of the woodwork during the 10 day standstill period, but the High Court case of Energy Solutions EU Ltd v Nuclear Decommissioning Authority serves as a useful reminder that this is not always the case.
As part of a wider procurement dispute, the Court was asked to resolve the question of whether the unsuccessful bidder was entitled to any award of damages, despite having failed to issue proceedings within the standstill period. This is a significant issue for all contracting authorities because, as was highlighted in the case:
"Delay in awarding the contract may well expose the authority, and thus the public purse, to the risk … of substantial financial loss."
Whilst a European Directive requires a minimum standstill period of 10 calendars days, the other time limits (such as how long an aggrieved bidder has to bring a claim) is a matter to be determined by national law. English and Welsh law gives aggrieved bidders 30 days to challenge a procurement from the date they first knew, or ought to have known, that the grounds for initiating a challenge had arisen.
It is important to highlight that this case does not create any new law: it simply restates the correct legal position which is misunderstood by many. On this basis, procurement teams should always keep in mind that the Alcatel standstill period, whilst a European requirement and an ideal time from an aggrieved bidder's perspective to initiate a procurement challenge, is no silver bullet when it comes to preventing challenges within the national time limits.