Procurement processes and the impact of Covid-19

With the Prime Minister's announcement on the 23rd March that the whole of the UK is effectively on a 'lock-down' and travel to and from the work place is restricted to where it is "essential", the majority (if not all) of those individuals who are involved in the bidding process (from the contracting authority and bidder side) are now working remotely and will be for at least a few weeks.

In response to Covid-19, the Cabinet Office has so far issued two procurement policy notes (PPNs). The first and most pertinent to this note - PPN (01/20), reminds contracting authorities of the flexibility that already exists in the Public Contracts Regulations 2015 (PCR) to respond to an emergency situation such as Covid-19. The note is aimed at those contracting authorities who  will have to respond to situations created by Covid19 such as emergency supply of medical equipment. It is not a relaxation of any procurement rules and any exemptions will still be strictly interpreted. From the Government's perspective, it appears to be that the procurement rules will apply as usual during this period.

For those contracting authorities who are or are intending to procure "business as usual" works, supplies and services contracts (eg regeneration schemes, IT services) – a decision needs to be made as to whether to continue or not with the procurement process in the current climate and if the decision is to continue, whether any adjustments to the conduct or timing of the process need to be made.

In our opinion, there should be no reason for contracting authorities to automatically decide to postpone or cancel procurement processes in the current environment. It is not clear at this stage how long we will have to adhere to this new way of working and therefore to wait until a return to  "business as usual" may mean months of delay to the delivery of much needed projects.

Whilst there may be issues with the actual delivery of the contract (e.g. supply chain and construction issues), these are all matters which the industry as a whole is grappling with and can be dealt with in the legal documents post award. The procurement process itself can still be dealt with via virtual platforms and remote working – those individuals who are usually involved in managing the process and bidding are, no doubt, ready and waiting to work remotely. 

As the Government has stressed, it is important for the health of the economy that procurement procedures and deals progress where they can - procurement is one of those areas where, with some sensible and reasonable adjustments,  progress can still be made.

There are no set rules on how to proceed with procurements in the present climate but sensible adjustments can be made to the process to accommodate new ways of working and rules on social distancing. We address some of these areas for consideration below:

Extensions to timetables - it would be sensible for contracting authorities to take stock of where they are in a procurement process and decide whether an extension to the timetable would be helpful for all parties.  The social distancing measures taken to tackle the Covid-19 outbreak were sudden and many businesses have had to adapt quickly to new ways of working and prepare business continuity plans. This would no doubt have caused disruption to day to day business and adding a reasonable extension to a timetable may be helpful in encouraging bidders to remain in the process and ensure that they have the time to prepare a quality bid. Any extensions granted must be done on a fair and transparent basis.

Adjustments to questions/criteria - contracting authorities should take the opportunity to review the procurement documents and evaluation criteria to determine whether any adjustments are required in light of the impact that the Covid-19 outbreak will have on projects and the changed environment that it will be delivered in.  An example might include any questions/criteria linked to key delivery milestones which are no longer achievable. Any adjustments to the criteria and questions will need to be considered on a case by case basis to ensure that they do not put the contracting authority in breach of the procurement rules.

Financial robustness – A key concern of contracting authorities will be whether bidders in live procurements still pass the financial thresholds set at SQ, how they address financial robustness going forward and what protections may need to put in place. We would recommend contracting authorities engage with their  financial advisors early on to determine whether this is an issue for that particular project and if so, legal advice may be required as to whether changes can be made in a compliant manner to address those concerns.

Bidder engagement pre-OJEU - Contracting authorities should still be able to carry out soft market testing and generate interest in the project prior to OJEU. Prior Information Notices (PINs) are an effective tool to warm up the market and advertise information prior to OJEU in a fair and transparent manner. Whilst physical bidder events are not currently appropriate – contracting authorities could consider recording presentations and providing a link in the PIN. Soft market engagement can still take place with potential bidders (e.g. via telephone, MS Teams, Zoom etc) although, as before, contracting authorities should carefully record such conversations and ensure that information made available to individuals pre-OJEU is made available to  all interested parties once the OJEU is published.

Use of a procurement portal – it is important to ensure that all communications from and to bidders are directed through the portal if the process anticipates that this is the only method of communication. Changes in the way that the procurement process is being conducted should not be an excuse for bidders to try and communicate directly with representatives from the contracting authority - a portal remains an important tool in minimising procurement risk for contracting authorities by creating an auditable record of communication.

Evaluation Meetings – Evaluation meetings can be conducted via video or tele-conference facilities. It is important that the parties involved follow the same procedures that they would have previously and robust audit trails are maintained of decisions made. 

Stakeholder engagement forums – it is increasingly common for contracting authorities to include some form of stakeholder engagement event with bidders during the procurement process. Such events need to be managed carefully to ensure that bidders are treated fairly and the contracting authority is clear about how any feed-back from stakeholders will be incorporated into the process. This process may actually be easier to manage virtually – bidders can provide online presentations which stakeholders can view at their own convenience (within a set time period) and comments can be fed-back via email to the team running the procurement process.

Bidder negotiation/dialogue meetings – Meetings with bidders can be conducted via video or tele-conference facilities. We would recommend that contracting authorities spend time beforehand testing any technology required for such meetings to ensure those participating in the meetings are familiar with the format and the technology is readily available to bidders. As before, contracting authorities need to ensure that bidders are given equivalent time and opportunities to discuss/negotiate their bids.  We would advise issuing a meeting protocol beforehand so that those participating in meetings are clear on the agenda, who will be required to join the meeting and any house-keeping rules. Full notes of meetings should be kept by the contracting authority and if the meeting is being recorded, the consent of all those attending the meeting will need to be sought beforehand.

Electronic signature of documents is becoming increasingly common and this should be an acceptable format for the majority of projects. There may be issues with some property documents where the Land Registry expect "wet ink" but a solution can be agreed on a case by case basis and hopefully such restrictions will be temporarily relaxed in due course to address the current situation.