The impact of Coronavirus on the Procurement Process

With the Coronavirus lockdown making no apologies for its impact, we must assess and understand what this means to our existing contracts, new procurements, and on-going procurements.

Existing Contracts

Due to the impact of the Coronavirus, certain contracting authorities may wish to modify an existing contract to better suit the current landscape and business needs.

Amending the parameters of a contract is allowed within the bounds of the regulation as long as the modification is not substantial.

Modifications that can currently be reviewed must follow certain conditions;

• They are not materially different in character from the original contract
• Amendments must not extend the scope of the contract considerably to encompass services not initially covered
• Modifications should not alter the economic balance in favor of the supplier

During this time, it is also acceptable to make a modification to a contract whose value is below the thresholds and percentages described in the regulation, and where a change of contractor is not possible (this may be due to economic or technical reasons).

As always, when considering amending a public contract the first consideration is the contract wording. The contract should include, within the initial procurement document, a review clause.

The review clause should allow for the extension of the contract in clear, unequivocal and precise terms. If this is the case, the review clause can be invoked at this time without the need to undertake a new procurement procedure. However, it is important to note that a general variation clause is not sufficient to invoke such changes.

New Procurements & Awards

Due to the novel nature of the Coronavirus impact, there have been some exceptions and changes made to allow new procurement & award processes to continue under the guidance notes of PPN 02/20.

Where a new award is required urgently, the contracting authority is allowed to undertake the negotiated procedure. This enables them to agree on a contract with one or more providers without any advertisement or competition. However, this is only possible if the authority is reacting to a genuine emergency and must warrant as such. Business Continuity planning does not classify as a genuine emergency in this situation.

The use of the negotiated procedure without notice will be rejected if, regardless of the unforeseeable nature of Coronavirus, the urgent requirement for a contract was in fact foreseeable. This may be the case where a contract will be required, but not immediately.

Throughout this, it is advisable that the contracting authority;

• Maintain a written log of justification that satisfies these criteria
• Continue to carry out assessments of these criteria before undertaking any additional procurement
• Limit requirements in these procurements to only what is absolutely necessary

In the event of urgent procedures, the procurement procedures under the regulations can be accelerated. This is possible when adherence to the normal time frames are no longer practical for reasons of urgency. The impact of the Coronavirus pandemic should satisfy this requirement, however, the need for the urgency must be directly related to the crisis and not a simultaneous issue.  Time frames have been accelerated to reflect the urgent nature of the pandemic.