What you need to know
- The Government Procurement (Judicial Review) Act 2018 (the Act) will commence on 19 April 2019.
- Unless a public interest certificate (PIC) is in place, accountable authorities must suspend a procurement when a complaint is received under the Act.
- The Complaint must be investigated and a report prepared, unless the investigation is first discontinued (which can occur in limited cases).
- Action should be taken to resolve complaints promptly (including where a PIC is in place).
What you need to do
- Agencies should make sure their complaint frameworks and processes are reviewed for consistency with the Act.
- Ensure responsibility for managing complaints is clearly defined and that those responsible are equipped to handle complaints thoroughly and quickly.
The complaint process
Under the Act, a supplier can submit a written complaint to an accountable authority about a covered procurement if a relevant CPR has been, is being, or may be breached, and the supplier can demonstrate that their interests are affected by the conduct.
The Act does not identify factors relevant to the assessment of whether a supplier's interests are affected by the alleged conduct, but we expect that standard will be interpreted broadly.
The Act does not specify a time limit to submit a complaint to the accountable authority for consideration. However, a complaint must be made under the Act before a court can grant an injunction, and an application for an injunction must be made within 10 days of the breach of the relevant CPR or of the party becoming aware of the breach (this can be extended in limited circumstances).
Suppliers are not strictly required to submit a complaint to the accountable authority before applying to a court for compensation. However, we expect complaints will usually be made before court proceedings are commenced. This is because the submission of a complaint would result in the suspension of the procurement (unless a PIC is in place) without the need for litigation.
Compensation awards under the Act can include reasonable expenditure incurred in connection with making and resolving complaints, so agencies should try to limit costs incurred by tenderers in relation to complaints.
Agencies will need to act quickly once a complaint is received. If the procurement needs to be suspended, that should be done without delay.
Investigation of complaints
A complaint that meets the requirements of the Act must be investigated by the accountable authority. There are no fixed timeframes for the investigation to commence or conclude, but where the procurement is suspended pending resolution of the complaint, there is a clear incentive to finalise the investigation as quickly as possible.
The Act requires that a report of the investigation be produced. If adverse findings are to be made against individuals in the report, those findings may need to be put to them so that they have a chance to comment on them before the report is finalised.
If the investigation of the complaint is not concluded before court proceedings are commenced, the accountable authority must consider whether the continuation of the investigation is likely to prejudice the proper administration of justice, and if so, the accountable authority must discontinue the investigation. These decisions may be subject to administrative law challenge.
An investigation can be discontinued if the complaint is withdrawn, resolved or determined by a court.
Agencies should establish a clear process for handling complaints including templates, time lines and a clear statement of responsibilities.
Suspension of procurement
A PIC can be issued for a procurement after the procurement has commenced or after a complaint is received. A decision to issue a PIC may be subject to administrative law review.
If a PIC is not issued and a complaint is made, the procurement must be suspended until the complaint is withdrawn, resolved, or the issues are determined by a court.
Depending on the stage of the procurement, the accountable authority will likely need to notify affected suppliers of a procurement suspension.
If a PIC is to be issued part-way through a procurement process, it may first be necessary to afford one or more suppliers an opportunity to be heard.
Agencies should consider whether to incorporate clauses dealing with the issue or potential issue of a PIC in their conditions of tender.
Attempts to resolve a complaint
Suppliers have an incentive under the Act to make complaints and to seek to resolve them. That is done in two ways, both linked to the availability of injunctions under the Act.
The first is that suppliers can seek an extension of the 10 day time limit to make an application for an injunction on the basis that the delay is attributable to efforts being made to resolve the complaint.
The second is that courts are required to consider whether efforts have been made to resolve the complaint when deciding whether to grant an injunction.
As we have emphasised above, agencies should act on complaints as quickly as possible.
Privilege and confidentiality
Agencies should assume that correspondence and investigation reports may end up before a court or otherwise in the public domain. Agencies should also assume that other tenderers may see the contents of investigation reports.
It is unlikely that the investigation report will attract legal professional privilege. This is because the report is being prepared as required under the Act rather than for the dominant purpose of legal advice or legal proceedings.
Ordinarily communications recording genuine attempts to resolve a dispute attract without prejudice privilege. However, the Act requires that courts consider whether reasonable efforts have been made to resolve complaints when deciding whether to grant injunctions. That may override any without prejudice privilege, although that is far from clear.
Confidentiality issues will need to be carefully considered when handling complaints made under the Act.
The importance of obtaining advice
Handling complaints under the Act will present real challenges. Agencies should seek advice early. Any team assisting with a complaint should include both commercial and dispute resolution practitioners to ensure that the Commonwealth's interests are appropriately protected.
Authors: Melanie McKean, Partner; Megan Knight, Counsel; Rob Andersen, Senior Associate; Hyans Mach, Counsel
