If you need emergency help with
– Public procurement
COVID-19: What you need to know
As a result of COVID-19 the UK government has issued commercial advice that potentially impacts all public sector buyers including central government, local authorities and charities, and all suppliers to the public sector.
The new advice covers a range of subjects including emergency procurement, supplier payment, contract changes and contract extensions.
You may be breaking the law – read more to ensure your organisation is legally compliant.
Procurement Policy Notes
On 18 March 2020 the Cabinet Office issued advice in the form of two Procurement Policy Notes (PPNs). You can find these PPNs on GOV.UK.
- PPN 01/20: Procurement Policy Note – Responding to COVID-19
- PPN 02/20: Procurement Policy Note – Supplier relief due to COVID-19
These PPNs give guidance to public sector bodies across a range of topics including
- Emergency procurement
- Extending existing contracts
- Changing existing contracts
- Paying suppliers, including pre-payment (this is a policy change)
- Releasing suppliers from some contractual commitments
In this COVID-19 support page, we explain in detail what the guidance means for public sector buyers and suppliers. We also provide some practical tips. Please note that the content here is only guidance, and you are advised to seek legal counsel.
Each case must be treated on its own terms. PPNs 01/20 and 02/20 emphasise that public bodies must act within the Public Contract Regulations. There has been no change to the law and no relaxation of the regulations.
Be aware that guidance on supplier relief may not be as clear as it seems, in particular the application to goods and services delivered in the UK.
For support with understanding, interpreting or implementing any of this guidance, click here to contact us today.
PPN 01/20 covers emergency procurements. This PPN is a re-statement of the existing guidance that governs the awarding of contracts to suppliers without a competition. This process is often called a direct award.
PPN 01/20 confirms that public sector buyers are allowed to make direct emergency awards under Regulation 32. PPN 01/20 also states that public bodies may make direct emergency awards due to COVID-19 but only if they have a legally valid justification to do so.
This guidance means that suppliers of equipment and services vital to COVID-19 efforts may be able to contract with central government, local authorities, charities and other public sector buyers without going through a competitive tender exercise.
Paying suppliers and relief from obligations
Changing or extending existing contracts
Some contracts include the term force majeure, which allows one or both parties to the agreement to make significant changes to the contract. Force majeure only comes into play when there are extreme circumstances beyond the parties’ control.
On the face of it, COVID-19 seems to be a clear case of force majeure. However, Procurement Policy Note 02/20 suggests that buyers and suppliers should negotiate and take a ‘pragmatic approach’ rather than look to force majeure clauses.
Force majeure is also not as straightforward as it may seem. There are few general rules about force majeure that can be applied to contracts. To understand what buyer and supplier rights are, one must look at the exact text of the contract and the current circumstances to determine if force majeure applies.