Utilities: Emergency Procurement due to COVID-19
Emergency Procurement – A timely reminder. In recent days, the Cabinet Office has published a Procurement Policy Note (“PPN”) in response to the urgent need for supplies and services due to issues relating to COVID-19 and to the potential for delay in the existing procurement processes.
The PPN provides a timely reminder for public sector purchasers, of the need to remain compliant with EU procurement rules that remain effective during the transition period.
Application to Utilities
The message of the PPN is generally applicable to the corresponding regulations that apply to utility and defence sector purchasers.
The relevant regulation in the Utilities Contracts Regulations 2016 is Reg. 50 (1) (d):
Utilities may use the negotiated procedure without prior publication may be used in the following cases: …
(d) insofar as is strictly necessary where, for reasons of extreme urgency brought about by events unforeseeable by the utility, the time limits for the open or restricted procedures or competitive procedures with negotiation cannot be complied with.
… the circumstances invoked to justify extreme urgency must not in any event be attributable to the utility.
Regulation 50 (1) (d) is designed to deal with events as serious as the consequences of COVID-19.
Utilities may enter contracts without advertising or competing the requirement if all the following tests are met:
- There are genuine reasons for extreme urgency
- The events that have led to the need for extreme urgency were unforeseeable
- It is impossible to comply with the usual timescales in the Utilities Contracts Regulations;
- The situation is not attributable to the utility.
The first test is met only as a reaction to a current emergency and not where the utility is planning for a future emergency.
It is likely that the second test would be met in the current circumstances, but be aware that as time moves on what was not previously foreseeable might be foreseeable. Additionally, if the utility knows that something needs to be done it is foreseeable.
The PPN states: “Delaying or failing to do something in time does not make a situation qualify as extremely urgent, unforeseeable or not attributable to the [utility]”
The third test is only met if there is a causal link between the unforeseeable event and the resulting extreme urgency meaning that it is not possible to apply the timescales in the Utilities Contracts Regulations. This does not provide a general exemption from the Utilities Contracts Regulations for all procurements. It is worth noting that the “accelerated” open procurement procedure allows the award of a contract within as little as 10 days.
The utility should record its justification for using this procedure and keep it with its records in the event of any challenge. The utility would have to demonstrate why the accelerated timescales were inadequate for the specific procurement.
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