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Lords amendment: No. 2, in page 2, line 22, leave out from first ("a") to end of line 27 and insert ("local authority has entered into a contract which is a certified contract
("the existing contract") and the existing contract is replaced by a contract entered into by it with a person or persons not identical with the person or persons with whom it entered into the existing contract, the replacement contract is also a certified contract if—")
§ The Minister for London and Construction (Mr. Nick Raynsford)I beg to move, That this House doth agree with the Lords in the said amendment.
Clause 2 (4) provides that, where a certified contract is novated—that is, replaced by another identical contract because a new contractor or financier is substituted for the original one—the new contract shall also be a certified contract. The amendment makes it absolutely clear that, for these purposes, a contract is replaced only if the parties to the contract are different.
§ Lords amendment agreed to.
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Lords amendment: No. 3, in page 2, line 37, at end insert—
("( ) The application of subsection (1) in relation to a contract entered into by a local authority does not affect any claim for damages made by a person who is not (and has never been) a party to the contract in respect of a breach by the local authority of any duty to do, or not to do, something before entering into the contract (including, in particular, any such duty imposed by a statutory provision for giving effect to any Community obligation relating to public procurement or by section 17(1) of the Local Government Act 1988).")
§ Mr. RaynsfordI beg to move, That this House doth agree with the Lords in the said amendment.
The amendment reflects concerns raised by the hon. Member for Christchurch (Mr. Chope) in Committee, as well as points made during the outside consultation. The amendment makes it clear that clause 2(1) does not prevent a person other than the contractor from bringing an action against the authority seeking damages because procurement procedures had been disregarded. In particular, we have in mind a claim by an unsuccessful bidder for the contract who feels that proper procurement procedures have not been complied with. Such legal action could result only in the payment of damages by the authority and not in the setting aside of the contract. It would not, therefore, affect the position of the appointed contractor or his financiers.
§ Mr. Christopher Chope (Christchurch)We are grateful for the Government's response to the concerns expressed on the issue.
§ Lords amendment agreed to.