Short implementation time may lead to an obligation to cancel the procurement

In a new decision regarding a framework agreement for the purchase of pharmaceuticals, the Norwegian Complaints Board for Public Procurement (KOFA) stated that setting an implementation deadline that is too short may constitute a breach of the public procurement legislation.

It is important that contracting authorities set sufficiently long time lines for implementation and that tenderers make the contracting authorities aware of any challenges related to implementation as early as possible in the procurement process.

Implementation time requirements

The contracting authority determines the requirements for the procurement process unilaterally, and has a wide margin of discretion when deciding the length of the implementation time from the signing of the contract to the time of performance.

The discretion is, however, limited by the general principles of the Norwegian Act on Public Procurement, which enforce equal treatment of tenderers and entail that the contracting authority cannot set requirements that unnecessarily restrict competition. The implementation time set by the contracting authority shall be long enough for all potential tenderers to have a real opportunity to participate in the procurement process.

Whether the implementation time is sufficiently long must be assessed on a case-by-case basis, based on the complexity and scope of the procurement in question. For instance, a tenderer will often need a longer implementation time if extensive preparations are required. On the other hand, the tenderer would be able to start the contract work within a shorter time frame if only simple preparations are needed.

KOFA decision: Framework agreement for procurement of medicine

On 8 November 2022, KOFA pronounced a decision regarding implementation times. The contested procurement in KOFA case 2022/1096 concerned Bergen municipality's an open procedure for a framework agreement for the purchase of pharmaceuticals for storage and packaging of multi-dose and single-dose for several municipalities. The agreement placed high demands on i.a. administration, interaction, and handling of sensitive information.

Based on the tender documents, the implementation time would be 2-5 months, depending on when the contract was signed. The contracting authority's internal schedule for signing the contract provided that the implementation time for one part of the delivery would be almost 3 months, whilst the other part would be fully implemented within 5 months.

The complainant argued that the municipality was obliged to cancel the procurement as the implementation time was too short and therefore constituted a breach of the procurement legislation. Bergen municipality denied this, arguing that;

• the implementation time was sufficiently long,
• the challenges associated with a short implementation time were alleviated by the fact that the contracting authority had circulated the procurement documents for consultation to potential tenderers, and statistics and other figures had been made available to interested suppliers, and
• the implementation time was lawful because it was objectively justified.

KOFA concluded that the procurement should have been cancelled as the implementation time did not comply with the principles of equal treatment and competition in the Public Procurement Act. The reasoning was that additional implementation time was required due to the extensiveness and complexity of the procurement in question e.g. to facilitate the transfer of large amounts of sensitive data from the existing supplier to the new supplier, as well as the implementation of an ordering system to ensure patient safety and training of staff. According to KOFA, the short implementation time entailed a high risk of failure in patient safety, which could have affected the interest of potential tenderers to participate in the procurement process.

Bring short implementation times to the attention of the contracting authority

The case illustrates the importance for contracting authorities to consider the length of the implementation time when planning procurements. A thorough assessment should be undertaken before each procurement. In case of uncertainty related to whether the implementation time is sufficiently long, contracting authorities may invite suppliers to provide input by conducting a market dialogue prior to publishing a contract notice. Market dialogue can be conducted both in writing and orally. Oral meetings may be hosted physically or digitally (e.g. on Teams).

As a general rule, tenderers are better suited than contracting authorities to assess the required length of the implementation time between the signing of contract and implementation. To ensure an effective procurement process, tenderers should address any challenges related to the implementation time as early as possible, and preferably during the market dialogue.