With immediate effect from Monday 23rd March, the UK government has temporarily suspended procurement competition law. This means that urgent works and services to combat the Covid-19 crisis can now be awarded without competitive tender. The change applies to all public sector contracting authorities.
Cabinet Office officials say that in the current exceptional circumstances, authorities may need to procure goods, services and works with extreme urgency.
This is permissible under current public procurement regulations (more details below), and this Procurement Policy Note is called is called Covid-19 PPN 01/20, and is available here.
What Does This Mean?
This means that UK Government departments, councils, NHS bodies and the wider public sector will be able to issue contracts directly without competitive tender, as part of an emergency change to procurement regulations during the coronavirus pandemic.
Not only can contracts be awarded directly, but existing contracts can be modified or extended.
In a Procurement Policy Notice (PPN), the Cabinet Office said it was "already clear in these exceptional circumstances" that public bodies may need to procure works, goods and services "with extreme urgency".
Brief Recap: What is Public Procurement Law?
The rules on purchasing of goods and services by public sector bodies in the UK are shaped principally by the 2014 European Union Public Procurement Directive. The requirements set out in this directive have been applied to England, Wales and NI through Public Contract Regulations 2015.
This competition law seeks to ensure that EU and national markets operate efficiently for the benefit of consumers.
The guiding principles of the regulations include safeguarding free competition, which typically provides the means for ensuring that public entities (and ultimately society as a whole), obtain the benefit of the best offers in terms of price, quality and innovation of the goods and services eventually purchased. Public procurement is generally driven by principles such as;
- free access to tenders
- publicity and transparency of the procedures
- equal non-discriminatory treatment of candidates
- the quest for efficient use of public funds by requiring prior definition of the needs to be satisfied
- safeguarding free competition and selection of the best economic offer
What Permits this Temporary Suspension?
Authorities are permitted to award urgent works and services to combat the Covid-19 crisis without competitive tender using regulation 32(2)(c) under the Public Contract Regulation 2015. In summary, options include:
- 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
How Has the Market Responded?
The Crown Commercial Service notice said: "COVID-19 outbreak is likely to give rise to supply chain disruption and contracting authorities may need to take action in response to supplier claims of ‘force majeure’ or contract ‘frustration’. These and other issues will be covered in future PPNs."
National procurement organisation Pagabo has announced that framework fees will be waived for any projects procured via its frameworks using the government’s procurement policy note.
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The government has temporarily suspended current competition law, meaning urgent works and services to help combat the Covid-19 crisis can now be awarded without competitive tender.