Procurement Case Note (ROI) : Irish Courts Affirm Strict Approach to Limitation Periods

Background

The case concerned a tender process conducted by the Department of the Environment, Climate and Communications (the “Department”) in 2011 which led to the award of a contract to develop and implement the national postcode system, Eircode. Following the commencement of the competition in January 2011, Loc8 Code Limited (the “plaintiff”) had queried a pre-qualification rule requiring candidates to meet a minimum turnover requirement of at least €40 million. At the time, the Department maintained that the requirement was reasonable in light of the value of the contract over its proposed 10-15 year term. The Department also reminded candidates that it was open to them to join together for the purposes of satisfying the turnover requirement and participating in the competition. The plaintiff did not accept the Department’s rationale for the turnover requirement. This culminated in its lawyers writing to the Department in February 2011 to request that the competition be abandoned on the basis that the turnover requirement prevented the plaintiff from bidding. The Department responded in April 2011 re-iterating its position and advising that the tender process would proceed. Ultimately, the plaintiff did not tender on its own or as part of a consortium. The procurement went ahead and the contract was awarded to Capita in December 2013.

 

The plaintiff’s claim and the Court’s decision

On 2 September 2022 (more than 11 years after the procurement process commenced and following various earlier interactions between the plaintiff and the Department in relation to that process), the Plaintiff issued proceedings against the Department, Capita (the successful tenderer) and An Post (the Irish state postal service) challenging the procedure and the contract award and seeking various reliefs. In response, each of the three defendants sought inter alia an order dismissing and/or striking out the proceedings on the basis that they were out of time.
In the proceedings the plaintiff made various claims relating to the procurement including conspiracy, breach of competition law, breach of state aid rules and interference with the conclusion of contracts. Notwithstanding that the Court considered that such claims were “vague and inadequately particularised”, its key observation was that they were “inextricably connected with and indeed derivative to the public procurement claim that is at the heart of these proceedings”. In this regard, the Court took a jaundiced view of the plaintiff’s efforts to recast elements of its claim as something other than a procurement challenge noting that it had been clear since the Irish High Court’s decision in BAM PPP Ireland Ltd and Balfour Beatty Ireland Ltd v. National Roads Authority that attempts to characterise public procurement challenges as something else will not be entertained.
The Court considered that the proceedings were, at their core, concerned with a challenge of the public procurement procedure. Accordingly, it found that the strict 30-day limitation period prescribed in Regulation 7(2) of the Procurement Remedies Regulations applied . It held that as the plaintiff had been aware of the €40 million turnover requirement since the pre-qualification requirements were published in January 2011 the proceedings were commenced eleven years too late.
The plaintiff also alleged that there had been an unlawful decision to modify the contract in 2013 to enable it to be used for services other than postal services. It argued that it only became aware of this in 2018. The Court dismissed this argument on the basis that it was time-barred also.
In light of its findings, the Court granted the order sought by the defendants dismissing the proceedings on the basis that they had been brought very considerably out of time.
The Court also considered that even if the proceedings were not to be properly decided under the Procurement Remedies Regulations but rather by way of ordinary judicial review (a position the Court rejected), the three-month time limit applicable to judicial review had also expired.

 

Comment

This appears have been a straightforward decision for the Court, particularly once it came to the view that the various claims advanced amounted effectively to a procurement challenge. It should serve as a reminder, if one were needed, of the strict application of the 30-day time limit in public procurement challenges. This has been endorsed by the Irish Courts on various occasions. It would appear that the plaintiff made no application to the Court to exercise a discretion and waive the applicable time limit, however even if it had the Court considered that this would have been “doomed to fail”. It is possible that the Irish Courts could adopt a more lenient approach to limitation periods in cases where a procurement challenge is commenced after contract award (the fact that a successful plaintiff would not benefit from the automatic suspension of the contract award process is potentially a relevant consideration). However, on this occasion it was simply not to be for Loc8 given in the inordinate delay in bringing the claim.