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ARTICLE · 19 JANUARY 2017

Disrupting procurement: the process contract and other avenues

Corrs Chambers Westgarth
Corrs Chambers Westgarth
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Corrs Chambers Westgarth

Corrs Chambers Westgarth

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The law should balance the need for accountability without allowing legal actions to be disruptive and obstructive.

AustraliaGovernment, Public Sector

Procurement is difficult enough. It's made infinitely tougher when you need to consider whether the tender process itself gives rise to a contractual relationship between the procuring entity and each tenderer. These relationships tend to abide by the terms of the procurement – the 'process contract'.

Fortunately, for procuring authorities, process contracts can generally be excluded with a well-drafted exclusion clause in the tender. However, with the Commonwealth Procurement (Judicial Review) Bill to be introduced into Parliament, for how long will entities be able to keep the actions of dissatisfied tenderers at bay?

Governments have become anxious. They're concerned that dissatisfied or unsuccessful tenderers will allege that a process contract gives them a right to seek damages. This could be for a breach of that contract and could possibly lead to an injunction. This, in turn, could stop the tender award or compel a procuring entity to reconsider a

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