COVID-19 Procurement Considerations

We are in unprecedented times.  Public sector services are experiencing sickness, staff absences and an urgent need for support from the private sector.  So what can contracting authorities do where works, services or supplies are needed urgently? 

Regulation 72 

You may be able to change or increase the scope of your existing contracts using Regulation 72.  

Many public sector bodies are already used to the list of exemptions set out in Regulation 72 which enable contracting authorities to change or increase the scope of a contract without running a new procurement.  It may be the case for example that you can amend the scope of the contract without it resulting in a substantial modification (Regulation 72(1)(e)).  Or perhaps additional works, services or supplies may now be necessary, and a change of contractor cannot be made for economic or technical reasons, or would cause significant inconvenience and substantial duplication of costs (Regulation 72(1)(b).   

Regulation 72(1)(c) allows a modification to an above threshold contract where the need for the modification has been brought about by circumstances which a diligent contracting authority could not have foreseen and where the modification does not alter the overall nature of the contract and the price increase does not exceed 50% of the value of the original contract or framework agreement. 

All of these exemptions may be applicable in the current circumstances and if more than one ground is applicable, you should include all relevant grounds in your written justification. 

Regulation 32 

Regulation 32(2) allows for the direct award of a contract without publication when for “reasons of extreme urgency brought about by events unforeseeable by the contracting authority” there is not enough time to undertake one of the procedures under the Procurement Regulations.   This will be particularly useful where no existing contract is in place or the amendments to an existing contract would be so substantial that it could be considered to be a new contract.  

It may also be possible to rely on Regulation 32(2) where the works, supplies or services can only be provided by one contractor because competition is absent for technical reasons and no reasonable alternative or substitute exists. 

When entering into a contract under this provision the contracting authority must still prepare a report in accordance with Regulation 84, and this must set out the circumstances referred to in Regulation 32 which justify the use of this procedure.  

Call-Off from an Existing Framework Agreement or DPS 

It may be possible for the contracting authority to use an existing framework agreement or dynamic purchase system to order urgent supplies, services or works provided that the call-off procedure in such framework agreement or DPS is followed. 

Light Touch Regime 

Contracting authorities may also consider using the light touch regime where specific health and social care services are needed.  Timescales should be proportionate and reasonable which will depend on the urgency of the requirement. 

Summary 

Please note that when using any of these options, contracting authorities should limit any risk by only doing what is necessary at the time, for example: 

• Contracts should only cover a limited time period until an open or restrictive procurement can be carried out and extensions of contracts under Regulation 72 or new contracts under Regulation 32 should be no longer than necessary. 

• The action taken should be proportionate to the risk that may arise if such works, supplies or services are not procured. 

• Additional works could be split between a number of providers rather than being given to one.  This would also help from a business continuity perspective. 

• As time goes on, it may be difficult to argue that events are ‘urgent’ or ‘unforeseeable’ and therefore longer-term planning may be needed. 

• Contracting authorities may want to extend time limits in current procurements to give bidders more time to respond at a time when public sector providers are learning how to work in new ways.  Contracting authorities could also use a standard procedure with accelerated timescales due to urgency. 

• Keep an audit trail of the decision-making process and the justification for taking such action. 

• Contracting authorities should still follow the correct decision making process and try to achieve value for money. 

Please seek legal advice in any of the above scenarios.  Our team are available to help and provide legal advice and guidance.