5.2.3 Risk of Challenge

Authorities should be aware that some public bodies have faced legal challenges in the courts following their attempts to implement changes to signed public contracts. These cases provide some clarification as to the rules on when a proposed Change to an existing public contract is so "material" that it amounts to a "new" Contract that should be procured under a new competition.  Changes to the Contract therefore need to be treated carefully.

Before committing itself to a course of action, the Authority should carry out an initial assessment with the Authority's Legal Department and, if appropriate, with its legal advisers to check that the proposed Change does not involve renegotiating the essential terms of the Contract. In doing this, the Authority will need to check the OJEU contract notice and background procurement documents. For this reason it is a good idea to have these documents readily available, as and when the need arises. Doing this prior check should mitigate as far as possible the risk of a legal challenge for breach of the procurement rules. 

At the time of writing this guidance, relevant factors to consider with legal advisers include:-

•   the likelihood that the change could have brought about a different outcome at the competition stage e.g. because a different bidder would have been successful;  

•   the extent of the change to the scope of the project as originally advertised. e.g. because different contractors might have responded to the advertisement; and

•   how much the change will affect the economic balance of the Contract, looking at such matters as its financial value and risk allocation e.g. Contract term, Payment Mechanism parameters.