The pressures on public bodies during the Covid-19 pandemic are well known. From a supplier’s perspective, this has placed unprecedented pressures on service levels, and also fast-tracked the appointment of new suppliers and the provision of additional goods and services.
By contrast however, there are many suppliers who provide goods and services for which there has been no, or more limited, need whilst the nation has been in the grips of lockdown.
As we start to move out of lockdown, it will be critical for these suppliers to be able to respond quickly to increases in demand and, hopefully, move towards a resumption to business as usual. Thankfully there is help at hand for these businesses in the continued application of PPN 02/20: Supplier Relief due to Covid-19.
PPN 02/20 is set to stay in place until 30 June 2020.That may be extended however, but until the government issues further guidance, the following apply:
- Contracting authorities can continue to pay “at risk” suppliers who are currently unable to provide services to their full extent. Crucially all staff on the contract must have been retained and paid in full by the supplier, and a supplier cannot also be in receipt of payments under the Coronavirus Job Retention Scheme.
- Where any services are being provided, suppliers should submit invoices promptly. Contracting authorities should pay those invoices promptly.
- In certain circumstances, a contracting authority can consider making advance payments to otherwise “at risk” suppliers.
- Where service delivery levels will be missed, relief provisions (eg service credits or KPI relief) should be used so that suppliers are not penalised.
- Similarly, both parties should adopt a pragmatic approach to any contractual variations needed.
- Supplier invoices must state which charges relate to “business as usual” and which are attributable to the impact of Covid-19.
- Suppliers should maintain an “open book” policy to give the contracting authority comfort that charges paid during this period have been applied as intended.