PPN 01/21: Procurement in an Emergency

The first procurement policy note of 2021 was published last month, and it reflects the Government’s ongoing approach to procurement amidst the backdrop of the response to the Covid-19 pandemic. PPN 01/21 builds on PPN 01/20 and came into force on 4 February 2021. It applies to contracting authorities, including central government departments, executive agencies, non-departmental public bodies, local authorities, NHS bodies and the wider public sector (“Contracting Authorities”). It serves as a useful reminder to Contracting Authorities of the procurement options available to them during an emergency, and the key factors that must be considered when acting on these options.

If a Contracting Authority has an urgent requirement for goods, services or works due to an emergency, and needs to procure this under the Public Contracts Regulations 2015 (“PCR”) its options include:

1. Call off from an existing framework agreement or dynamic purchasing system;
The Contracting Authority must ensure that:

  • it is clearly identified as a permitted customer in the original Find a Tender Service (“FTS”) or OJEU notice or the invitation to confirm interest;
  • the goods, services or works to be procured fall within the scope of those covered by the framework agreement or DPS;
  • the framework agreement was awarded or the DPS was established in accordance with the PCR;
  • the terms of the framework agreement or DPS are suitable and meet its requirements without the need for significant changes;
  • the procedure for awarding a call off contract set out in a framework agreement is followed;
  • if using DPS, any award is by mini-competition and the minimum time for receipt of tenders is 10 days.

2. Call for competition using a standard procedure with accelerated timescales;
The Contracting Authority can:

  • reduce standard timescales for the open, restrictive, and competitive procedure with negotiation if these are impracticable in an emergency;
  • reduce timescales for receipt of tenders to 15 days (plus 10 day standstill period) for the open, restrictive, and competitive procedure with negotiation; and
  • use the Light Touch Regime for specific health and social care related services – note that notices must still be published on FTS, but it can choose the procurement process and set its own timescales provided they are reasonable and proportionate.

3. Extending or modifying a contract during its term;
Reg 72(1)(c) PCR can be used to modify existing contracts without a new procurement procedure where:

i. the need for modification has been brought about by circumstances which a diligent contracting authority could not have foreseen;
ii. the modification does not alter the overall nature of the contract;
iii. any increase in price does not exceed 50% of the value of the original contract or framework agreement.

  • modifications should be published by way of a notice on FTS;
  •  written justifications should be kept and all grounds applicable under Reg 72 should be included;
  •  justifications should show any extension/modification was related to the emergency;
  • any extensions or modifications should be limited to what is absolutely necessary to address the unforeseeable circumstance.

4. Direct award due to absence of competition or protection of exclusive rights;
Direct Award of contracts is permitted under Reg 32(2)(b) PCR where:

  • the works, goods or services needed to respond to the emergency can only be supplied by a particular supplier because:
    • there is no competition due to technical reasons or;
    • the protection of exclusive rights; and
  • there is no reasonable alternative or substitute available; and
  • Contracting Authorities are not artificially narrowing down the scope of the procurement;
  • written justifications to show that the test is satisfied should be kept; and
  • the situation should be re-assessed before a repeat procurement is carried out.

5. Direct award due to extreme urgency under regulation 32(2)(c).
Direct award of Contracts is permitted under Reg 32(2)(c) PCR where:

  • there are genuine reasons for extreme urgency;
  • the events that have led to the need for extreme urgency were unforeseeable; and
  • the situation is not attributable to the contracting authority.
    • written justifications showing the test has been satisfied must be kept;
    • the situation should be re-assessed before a repeat procurement is carried out;
    • delaying or failing to do something does not qualify a situation to satisfy the test; and
    • requirements should be limited to what is absolutely necessary in terms of the goods/works/services procured and the length of the contract.

Value for Money

Contracting Authorities must continue to achieve value for money in an emergency situation, and should manage this consideration against the risk of not being able to secure the required goods or services. Accurate records of decisions and procurement procedures should be kept, and where possible due diligence on suppliers should be undertaken before making a direct award.

For further details on PPN 01/21 and its application, or any other public sector or procurement queries, please contact our Public Sector team who will be more than happy to assist you.

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