Reg.103 of the Public Contracts Regulations 2015 (PCR2015) establishes rules on ineffectiveness and shortening of duration in relation to specific contracts based on a framework agreement. This regulation alters the rules of regs.99 to 102 in relation to specific contracts based on a framework agreement. However, most of the comments made in relation to those regulations apply here as well (see Pedro's comments here).
Reg.103(1) PCR2015 determines the scope of application of these special rules and clarifies that the “specific contracts” it covers are those which are based on the terms of a framework agreement; and were entered into before a declaration of ineffectiveness (if any) was made in respect of the framework agreement on which they are based. The need for these special rules derives from reg.103(2) PCR2015, which determines that a specific contract is not to be considered to be ineffective merely because a declaration of ineffectiveness has been made in respect of the framework agreement.
Ineffectiveness of 'relevant' specific contracts
In that case, following reg.103(3), where a declaration of ineffectiveness has been made in respect of the framework agreement, the Court must make a separate declaration of ineffectiveness in respect of each relevant specific contract. Therefore, regs.103(2) and (3) clearly decouples the (in)effectiveness of contracts awarded within a framework agreement before the declaration of its ineffectiveness from the ineffectiveness of the latter itself.
For these purposes, a specific contract is relevant only if a claim for a declaration of ineffectiveness in respect of that specific contract has been made within the time limits mentioned in reg.93 PCR2015 as applicable to the circumstances of the specific contract; regardless of whether the claim was made at the same time as any claim for a declaration of ineffectiveness of the framework agreement [reg.103(4) PCR2015].
This is bound to limit the issue of ineffectiveness of specific contracts within the framework to those that are actually litigious, and is in line with the option for a restriction of the consequences of a declaration of ineffectiveness only for the future, or ex nunc, under reg.101(1) PCR2015.
General interests excluding ineffectiveness of 'relevant' specific contracts
When determining whether a relevant specific contract should be declared ineffective on top of the ineffectiveness of the framework agreement it is based on, reg.100 PCR2015 (general interest grounds for not making a declaration of ineffectiveness) applies insofar as the overriding reasons relate specifically to the circumstances of the specific contract [reg.103(5)].
Ineffectiveness of (non-'relevant') specific contracts due to general grounds
Moreover, reg.103(6) coordinates the rule in reg.103(3) and (4) with those in reg.95 PCR2015, to the effect of preventing the contracting authority from entering into specific contracts based on a framework which effectiveness has been challenged. That obligation is implicit and, consequently, where a claim form has been issued in respect of a contracting authority’s decision to award the framework agreement, the contracting authority has become aware that the claim form has been issued and that it relates to that decision, and a/any specific contract(s) have not been entered in, the contracting authority is required to refrain from entering into any such specific contracts based on the litigious framework agreement--and, failing that, it will be considered to have infringed the requirements of reg.95 PCR2015 and the Court will be able to declare the ineffectiveness of any such specific contracts. The same applies in relation to interim measures altering or restoring such suspension of the contract-making powers of the contracting authority.
In terms of reg.103(6)(b), thus, the regulation not prejudice the making of a declaration of ineffectiveness in relation to a specific contract in accordance with other provisions on the basis of the second ground of ineffectiveness set out in reg.99(5), where (i) the
relevant breach of the kind mentioned in reg.99(5)(a) is
entering into the specific contract in breach of regs.95 or
96(1)(b) PCR2015, and the relevant 'additional' breach of the kind mentioned in
reg.99(5)(b) relates specifically to the award of the specific
contract and the procedure relating to that award, rather than to the
award of the framework agreement and the procedure relating to it. Further to this, and even if the clarification is quite circular and unnecessary, under reg.103(6)(a), the third ground of ineffectiveness set out in reg.99(6) and (7) also applies to the entering into of specific contracts based on a framework agreement.
No other grounds for ineffectiveness of specific contracts
Reg.103(7) PCR2015 limits the possibilities to declare the ineffectiveness of a specific contract based on a framework agreement other than in accordance with reg.103(3) (separate declaration of ineffectiveness in respect of each relevant specific contract) or on a basis mentioned in reg.103(6)--which, basically, comes to exclude the possibility of declaring the ineffectiveness under the first ground foreseen in reg.99 PCR2015.
Effects derived from the ineffectiveness of specific contracts
According to reg.103(8) PCR2015, where a declaration of ineffectiveness is made in respect of a specific contract in accordance with reg.103(3), reg.101 (the consequences of ineffectiveness) applies, but reg.102(1) (requirement to impose a civil financial penalty) does not apply. This makes sense and avoids the imposition of excessive penalties when the ineffectiveness of a relevant specific contract derives from or comes in addition to the ineffectiveness of the framework agreement it is based on--which will already have triggered the imposition of penalties under reg.102 PCR2015.
A contrario, where the ineffectiveness of a (non-'relevant') specific contract derives from other grounds, as foreseen in reg.103(6) PCR2015, the full remedies foreseen in reg.98 are available and regs.101 and 102 need to be applied strictly.
Reg.103(9) foresees that, where the Court refrains from making a declaration of ineffectiveness which would otherwise have been required on the basis of general interest grounds, the Court must order that the duration of the contract be shortened to the extent specified in the order. The extent by which the duration of the contract is to be shortened is the maximum extent, if any, which the Court considers to be possible having regard to what is required by the overriding reasons of general interest [reg.103(10)]. For these purposes, “duration of the contract” refers only to its prospective duration as from the time when the Court makes the order [reg.103(11) PCR2015].
Reg.103(9) foresees that, where the Court refrains from making a declaration of ineffectiveness which would otherwise have been required on the basis of general interest grounds, the Court must order that the duration of the contract be shortened to the extent specified in the order. The extent by which the duration of the contract is to be shortened is the maximum extent, if any, which the Court considers to be possible having regard to what is required by the overriding reasons of general interest [reg.103(10)]. For these purposes, “duration of the contract” refers only to its prospective duration as from the time when the Court makes the order [reg.103(11) PCR2015].
It is interesting to note that these considerations are not exactly parallel to those derived from shortening of contracts which ineffectiveness is excluded by general interest grounds under reg.102(2)(a) and (3) PCR2015, where the limits to the shortening of the contract derived from the general interest grounds are not expressly referred to. However, in my view, there is no reason not to apply these rules analogously to that case.