The Cabinet Office has issued a procurement policy note on recovery and transition from COVID-19 that applies to all contracting authorities.
The latest policy note (04/20), which builds on the supplier relief provisions contained in PPN 02/20, says all contracting authorities should:
- 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 if operational requirements have changed significantly.
- Work in partnership with their suppliers, openly and pragmatically, during this transition 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 policy note is applicable to all contracting authorities, including central government departments, executive agencies, non-departmental public bodies, local authorities, NHS bodies and the wider public sector (excluding the devolved administrations).
It covers goods, services and works contracts being delivered in the UK (including PFI and PF2 contracts). It is effective from 1 July to 31 October 2020.
The PPN says the supplier relief provisions set out in PPN 02/20 may still be appropriate as the government moves into the next phase of the response to the COVID-19 outbreak.
The policy note suggests that it may be necessary for the parties to discuss contract termination. “If a contracting authority views a contract as no longer relevant or viable, they should work with the supplier to pursue termination based on the existing contractual remedies.”
It adds: “Unreasonable expectations around transfer of risk and cost are likely to increase the probability of contract failures and may mean suppliers exit the market and weaken competition. The Outsourcing Playbook sets out how contracting authorities should constructively engage with suppliers.”
The PPN covers:
- Payment to maintain continuity
- Transition planning
- Responsible behaviour
- Accelerating payment of invoices
The policy note can be viewed here.