ThommessenFlow Find people
Legal developments

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

Kontrakt

If the contractor addresses any challenges associated with implementation time as early as possible in a procurement process, it may be possible to ensure a good process between the client and the contractor.

In a new decision on a framework agreement for the purchase of medicine, the Norwegian Board of Appeal for Public Procurement (KOFA) stated that setting a deadline for implementation that is too short may constitute a breach of the Public Procurement legislation. It is important that contracting authorities set a sufficiently long time line for implementation and that tenderers make the contracting authority 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 a procurement process unilaterally, and has a wide margin of discretion when deciding the time line from signing of contract till the contract enters into force.

The discretion is, however, limited by the general principles of the Public Procurement Act (NW: Anskaffelsesloven), 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 tender.

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

KOFA decision: Framework agreement for procurement of medicine

KOFA pronounced an opinion regarding implementation time on 8 November 2022. The contested procurement in KOFA case 2022/1096 was an open procedure for awarding a framework agreement for the purchase of medicine for storage and multi dose and single dose packaging, arranged by Bergen municipality. The agreement placed high demands on i.a. administration, interaction, and handling of sensitive information.[1]

Based on the tender documents, the implementation period would be 2-5 months, depending on when the contract was signed. The contracting authority's internal schedule for signing of 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 from 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 transfer of a large amount 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 suppliers to participate in the tender.

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 process. 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 (Teams etc.).

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

Contact persons