Public bodies must adhere to the Public Contracts Regulations 2015 (“PCR”) when awarding public contracts which fall within the scope of the PCR and exceed specified financial values. The procedures for contract award vary but, in most cases, the public body is required to advertise the contract via an OJEU notice, and follow specified procedures for selecting candidates and assessing tenders. As our public sector clients will be well aware, this can be time consuming.
Given the pressures public bodies are facing as a result of COVID-19, it is envisaged that urgent procurement of goods and services may be necessary and public bodies may seek to expedite the usual procurement process.
There has currently been no relaxation of the PCR in response to COVID-19. However, in some circumstances, urgent procurement can be conducted without public bodies breaching the regulations. The Government issued guidance yesterday to support public bodies in responding to the current Coronavirus outbreak and complying with the PCR. Procurement Policy Note 01/20: Responding to COVID-19
Regulation 32(2) of the PCR provides an exemption from the standard PCR procedures and allows public bodies to use the negotiated procedure without prior publication (a much more time efficient procedure) for public works contracts, public supply contracts and public service contracts necessary “where, for reasons of extreme urgency brought about by events unforeseeable by the contracting authority, the time limits for the open or restricted procedures or competitive procedures with negotiation cannot be complied with.”
If a public body needs to respond to the COVID-19 consequences immediately and procure goods or services because of, for example, public health risks or the loss of existing provision at short notice, this should be deemed as a reason of extreme urgency. If a public body seeks to rely on this exemption, it must be reacting to a current situation that is a genuine emergency. Planning ahead for a situation of extreme urgency is not a sufficient reason. If there is time to comply with normal procurement procedures such as calling off under a framework you must do so. If you need to rely on this exemption, you must limit your requirements to only what is absolutely necessary (quantity and contract length) and use good commercial judgement to achieve value for money (it is accepted that prices may be higher than normal). The event causing the need for extreme urgency must be unforeseeable and the situation must not be attributable to the public body e.g. a delay or failure to do something.
Government guidance indicates that COVID-19 related emergencies are likely to satisfy the criteria for applying the extreme urgency exemption.
Lack of competition
As the virus spreads, it is likely that competition will reduce. Regulation 32(2) also allows for the negotiated procedure without prior publication to be adopted where the public body can only procure from a particular supplier because competition is absent for technical reasons and rights e.g. intellectual property rights are exclusive to the supplier. This exemption from normal procedures can only be adopted if there is no reasonable alternative/substitute available. The public body must ensure that it has not narrowed the scope of its requirements unnecessarily reducing its options of supplier.
Other options to speed up procurement
- Accelerated timescales – if a state of urgency renders the standard timescales impractical, the public authority may opt to notify bidders that it will be using accelerated timescales. The PCR sets out minimum accelerated timescales which vary depending on the procurement procedure adopted.
- Extending or modifying a contract- subject to restrictions set out in the PCR including foreseeability and increase in contract price, regulation 72(1) allows for modification of contract without carrying out a further procurement procedure. This may be useful if, for example, additional services are required urgently or a public body wishes to extend the contract term.
- Calling off from an existing framework – public bodies may wish to consider their ability to call off from existing frameworks for which they are a permitted customer. This will allow public bodies to avoid a separate procurement process.
Public bodies should keep written justifications of their use of the methods set out above to expedite procurement. If it is subject to a procurement challenge in the future, the justification may be useful evidence.
Breaches of the PCR 2015 can have serious consequences and public bodies should take care when implementing the options set out in this article.