Public Procurement under the Public Contracts Regulations 2015: what next?

8th June 2020

At the moment it is difficult to think of many markets or businesses which have not been impacted by Covid-19, particularly if you supply goods and services to public bodies deemed to be “contracting authorities” under the Public Contracts Regulations 2015 (the PCR). If your business is one of the few which has not been impacted, it has been, and continues to be business as usual in terms of both procurement procedures and contractual/payment terms. If, however, demand for the goods or services you provide to contracting authorities has been impacted by Covid-19, you may well already be familiar with PPN 01/2020: Responding to Covid-19 and PPN 02/2020: Supplier Relief due to Covid-19.

These PPNs have had a significant impact on the procurement landscape since their introduction in March, but have brought a heavy burden both financially and in terms of compliance and administration. All eyes will therefore be on the months ahead as contracting authorities and businesses alike look to regain their footing.

The Procurement Policy Notes – the short term impact

To recap, PPN 01/2020 sets out information and guidance which enables contracting authorities and suppliers to react quickly and flexibly where an urgent need for goods or services is established as a consequence of the Covid-19 pandemic.

PPN 02/2020 is focused on the supply chain and has a two-pronged impact which:

  • Enables contracting authorities to expedite payments and adopt flexibility around contractual terms where a supplier is critical to the contracting authorities’ ability to meet the additional demands placed upon it by the pandemic
  • Gives contracting authorities a wide discretion (in terms of payment and flexing contractual provisions) where a supplier deemed critical to the medium or long term provision of goods or services is financially “at risk” as a consequence of the pandemic.

Both PPN 01/2020 and PPN 02/2020 are currently set to remain in place until 30 June 2020.  Either or both may be subject to extension/revision, depending on the speed at which the demand for goods and services picks up as we leave lockdown behind us. Whilst the stringent requirements (such as those around urgency) in PPN 01-2020 are less likely to be met as time passes, PPN 02/2020 is likely to remain important in the medium term where the need for goods and services is ramped up slowly rather than the ‘on’ switch suddenly being flicked.

Businesses falling within the scope of the PPNs (and PPN 02/2020 in particular) may therefore continue to benefit from a degree of protection in the short term.  Beyond that however, with public funding in crisis, there will be a clear expectation that suppliers will be geared up to reconvene supplies to contracting authorities under the usual contractual arrangements at the earliest available opportunity.

As the pandemic eases, our focus will no doubt shift back to the negotiation of the terms of our withdrawal from the EU. In the medium term, this leaves us subject to the existing UK procurement framework as embodied in the PCR (or indeed other applicable regulations).  Therefore very little looks set to change at least for now; after all, the PCR implemented the EU procurement directives into UK law.

At the moment the only publicised change as of 1 January 2021 will be the requirement on a UK contracting authority to publish a procurement notice on the Find a Tender website (rather than in the Official Journal of the European Union) either directly or via a third party ‘e-sender’, where notices will be viewed by would-be suppliers. For now we look set to return to the familiar, and the assumption should be that any advertisements or bids anticipated for the coming months should proceed on that basis.

This article does not constitute legal advice. Specific legal advice should be taken before acting on any of the issues covered.

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