SMEs, the Procurement Pie and Procurement Challenges

As the Procurement Bill has made its way through Parliament, there has been much talk of giving 'smaller companies a bigger slice of the procurement pie'. It remains to be seen if, and to what extent, the relevant proposed amendments to the Bill are retained in the final version of the legislation. 

However, what is striking is the significant challenges many SMEs would continue to face in the event of a breach (or suspected breach) of the procurement rules. 

The relevant fee to commence a claim with a monetary value of over £200,000 in the English courts is £10,000. In the world of litigation outside of the public procurement sphere, there is usually ample time for parties to discuss the relevant dispute, with a view to reaching a settlement without incurring the cost of issuing proceedings. However, and while there are time limits (limitation periods) within which all claims must be brought, the relevant limitation period for public procurement challenges is just 30 days (beginning with the date when the claimant first knew or ought to have known that grounds for starting the proceedings had arisen). In the event of any uncertainty regarding the date on which the limitation period expires, claimants will commence proceedings as soon as possible to try to avoid any argument that they are out of time. 

So, up against a very tight deadline, potential claimants rush to seek urgent legal advice and, in order to protect their position as best as possible, may prepare and issue a claim in advance of having had adequate opportunity to discuss the matter with the contracting authority. 

So what? Well, the urgent legal advice, the preparation of court proceedings, and the cost of commencing proceedings all add up to what may very well be a prohibitively high cost for an SME to incur in order to pursue a remedy for breach of the procurement rules. In such cases, having a slice of the procurement pie may not look so appealing.


This information is for general information purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. Please contact us for specific advice on your circumstances. © Shoosmiths LLP 2024.



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