The UK Government has published a number of procurement policy notes ("PPNs") to support public bodies ("contracting authorities") and their suppliers in mitigating the impact of COVID-19.
PPN 04/20 updates and builds on the guidance set out in PPN 02/20 and is effective from 1 July to 31 October 2020. PPN 02/20 sets out the actions contracting authorities should take to provide relief to suppliers at risk due to COVID-19 on a continuity and retention basis.
The key message in PPN 04/20 is that contracting authorities should review their contract portfolios to determine whether to continue to provide any contractual relief. As the Government moves into the next phase of the response to COVID-19, contracting authorities and their suppliers will now need to work together to plan an eventual exit from any contractual relief and transition to a new and sustainable operating model suitable for the post-COVID-19 world.
The guidance acknowledges that it may be necessary for parties to discuss contract termination, for example where a contract is no longer relevant or viable. It advises the contracting authority to work with the supplier to pursue termination based on the existing contractual remedies. The Government has also issued an updated Outsourcing Playbook which sets out how contracting authorities should constructively engage with suppliers. This can be found here: https://www.gov.uk/government/publications/the-outsourcing-playbook
This PPN repeats some of the guidance in PPN 02/20 in terms of prompt payment and contractual relief but it acknowledges that "Supplier relief payments are not intended to be an economic response to this emergency, nor to supplement or duplicate the wider support measures made available by the Government to UK businesses.” This perhaps emphasises that supplier support should only be given where consistent with other Government duties and initiatives.
It also reminds contracting authorities of the risk of supplier insolvency and advises contracting authorities to keep a comprehensive record of all decisions and actions relating to making payments to suppliers at risk to support transparency and any future scrutiny of value for money.
PPN 04/20 makes it clear that any support or relief provided for COVID-19 is temporary and contracting authorities should now start planning to exit from any relief or support granted by 31 October 2020.
Procurement Policy Note 04/20: Recovery and Transition from COVID-19 sets out information and guidance for public bodies on payment of their suppliers to ensure service continuity during the current coronavirus, COVID-19, outbreak. It updates and builds on the provisions contained in PPN 02/20