COVID-19: Procurement Policy Notes

24 Mar 2020 03:30 PM

The Cabinet Office has issued two Procurement Policy Notes (PPN) in relation to COVID-19.

PPNs are issued by central government to help public sector organisations (referred to as contracting authorities) deliver best practice in procurement.

Procurement Policy Note 01/20: Responding to COVID-19

This PPN recognises that public sector organisations may need to procure goods, services and works with extreme urgency and permits authorities to do this using regulation 32(2)(c) under the Public Contract Regulations 2015.

The PPN covers options that may be considered in relation to procurements under the Public Contract Regulations 2015, including:

• direct award due to extreme urgency (regulation 32(2)(c)
• direct award due to absence of competition or protection of exclusive rights
• call off from an existing framework agreement or dynamic purchasing system
• call for competition using a standard procedure with accelerated timescales
• extending or modifying a contract during its term

Procurement Policy Note 02/20: Supplier relief due to COVID-19

The PPN sets out information and guidance for public bodies on payment of their suppliers to ensure service continuity during and after the current coronavirus, COVID-19, outbreak. It states that contracting authorities must act quickly to ensure suppliers at risk are in a position to resume normal contract delivery once the outbreak is over.

The PPN states that all contracting authorities should:

• Urgently review their contract portfolio and inform suppliers who they believe are at risk that they will continue to be paid as normal (even if service delivery is disrupted or temporarily suspended) until at least the end of June.
• Put in place the most appropriate payment measures to support supplier cash flow; this might include a range of approaches such as forward ordering, payment in advance/prepayment, interim payments and payment on order (not receipt).
• If the contract involves payment by results then payment should be on the basis of previous invoices, for example the average monthly payment over the previous three months.
• To qualify, suppliers should agree to act on an open book basis and make cost data available to the contracting authorities during this period. They should continue to pay employees and flow down funding to their subcontractors.
• Ensure invoices submitted by suppliers are paid immediately on receipt (reconciliation can take place in slower time) in order to maintain cash flow in the supply chain and protect jobs.