How can contracting authorities procure in an emergency?

Following the National Audit Office (NAO) report in November 2020 on its investigation into government procurement during the COVID-19 pandemic, the Cabinet Office has this month issued further guidance for contracting authorities when undertaking procurements in an emergency: PPN 01/21 – Procurement in an Emergency.

Background

When the COVID-19 pandemic hit, public bodies had to respond quickly and needed to procure significant volumes of goods, services and works with extreme urgency.

On 18 March 2020, the Cabinet Office issued guidance on public procurement regulations when responding to the pandemic. The guidance noted that public bodies are allowed to procure goods, services and works in situations of extreme urgency using regulation 32(2)(c) of The Public Contracts Regulations 2015 (PCRs).

There has been widespread concern expressed about the potential risks to public money that could arise from increased reliance on using regulation 32(2)(c) to award contracts during the pandemic. Such concerns range from questions of transparency to bias and conflict of interest, as well as whether contracts were awarded to less than suitable suppliers.

PPN Guidance

The PPN 01/21 guidance reminds contracting authorities of the various options available to them, including using regulation 32(2)(c), when running procurements under the PCRs in an emergency. It also highlights the commercial risks involved when making a direct award without competition.

The options for procurement in an emergency are set out in the guidance:

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

Contract award notices should be published on the Find a Tender Service and this includes contracts awarded following an emergency procurement under regulation 32(2)(c).

The guidance goes on to remind contracting authorities of the importance of continuing to get value for money, using good commercial judgement and proper decision-making processes when procuring and awarding contracts, including direct awards, in an emergency.

Regarding decision-making, contracting authorities must keep proper records and documentation to evidence their reasoning and decisions made throughout the whole lifecycle of the procurement, including under 32(2)(c), as required by regulation 84 PCRs.

When the procurement is run under regulation 32(2)(c), the guidance is that contracting authorities should still at least consider “some form of advertisement, or informal competition and/or undertaking due diligence on the supplier market before making a direct award”. Although this is not an actual requirement of regulation 32(2)(c) the fact that the guidance includes this as the approach to be taken, underlines the importance of always running procurements with commercial judgement to get value for public money even, or perhaps especially, in an emergency.

You can read the full PPN 01/21 here. If you would like advice in relation to procurement, please contact Siobhan Collis in our Public Sector Team.