On 9 June 2020, the Cabinet Office published Procurement Policy Note 04/20: Recovery and Transition from COVID-19 (PPN 04/20). PPN 04/20 updates and builds on the provisions of PPN 02/20 which was published in March this year.
PPN 04/20 sets out information and guidance for public bodies on payment of their suppliers, in order to ensure service continuity during the current COVID-19 outbreak. PPN 04/20 is applicable to all contracting authorities and covers goods, services and works contracts being delivered in the UK (including PF1 and PF2 contracts). PPN 04/20 is effective from 1 July to 31 October 2020.
The earlier PPN 02/20 and its guidance set out the steps contracting authorities should take in relation to providing relief to suppliers deemed to be at risk as a result of COVID-19, on the basis of continuity and retention. The guidance accompanying PPN 04/20 recognises that as the Government transitions to a COVID-19 recovery strategy, that contracting authorities should now be starting to plan how to exit contractual relief arrangements with suppliers, in order to move to a situation over the medium to long term where contracts are both sustainable and provide value for money.
PPN 04/20 states the actions that all contracting authorities should take, focusing on transition planning:
- review their contract portfolio, including where they are providing any contractual relief due to COVID-19 and, if appropriate to maintain delivery of critical services, continue or commence measures in line with PPN 02/20
- work in partnership with their suppliers and develop transition plans to exit from any relief as soon as reasonably possible. This should include agreeing contract variations where there have been significant changes to operational requirements
- during transition, work in partnership with their suppliers, openly and pragmatically to ensure contracts are still relevant and sustainable and deliver value for money over the medium to long term
- continue to pay suppliers as quickly as possible, on receipt of invoices or in accordance with pre-agreed milestone dates, to maintain cash flow and protect jobs.
The guidance emphasises the importance of contracting authorities and suppliers continuing to work collaboratively to ensure transparency. In addition to PPN 04/20 the Cabinet Office has also published some non-statutory guidance for contracting authorities and suppliers on responsible contractual behaviour in relation to contracts affected by COVID-19, encouraging parties to act fairly and responsibly to help protect jobs and the economy.
Birketts has a specialist Public Sector Team and works extensively with local authorities and their partners. For further information regarding the above, please contact Siobhan Collis or another member of the Public Sector Team.
The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at June 2020.