There are two stages of procurement disputes. The first concerns the bidding process and often involves public authorities. A bidder can bring a challenge against the contracting authority when it feels that the process was unfair, the rules were violated, or that the bidder was unjustly excluded to the advantage of another bidder.
These disputes are bound by very tight time-limits, often 10 days or so, called the ‘suspension period’ following the decision of the contracting authority to award the tender and before the contract is signed with the successful bidder.
A claimant will usually file a request quickly to the competent court or authority listed in the tender before the contract is issued to obtain an automatic suspension of the contract for a longer period. This is where various negotiation or mediation processes may be used.
For example, a settlement could be reached to re-advertise the tender. Public bodies will generally provide details in their procedures for an appeal process and the body responsible for mediation. Public authorities in several countries have adopted mediation to ensure that relationships between buyers and suppliers remain non-adversarial.
The second type of dispute relates to the contract itself. Dispute resolution clauses will not be negotiable and the bidder must conform to whatever process is required by the contract – court, arbitration or combined mediation and arbitration.