The first Procurement Policy Note of 2021 has been published.
The newly published PPN 01/21- Procurement in an Emergency, applicable to all contracting authorities, is effectively a repeat of “PPN 01/20 – Responding to COVID19”, with additional warnings on the commercial risks in making direct awards.
PPN 01/21 seeks to remind contracting authorities of the options available, but also sets out inherent commercial risks when procuring in an emergency.
The PPN states that “It is important that contracting authorities continue to achieve value for money and use good commercial judgement and sound decision-making in an emergency, including when making direct awards. Authorities need to manage these in the context of the broader risk of not being able to secure the required goods or services in a timely manner. Potential risks include:
· poor value for money such as abnormally high pricing;
· unequal treatment of suppliers in the procurement process;
· poor practice due to procuring at speed, such as retrospective contract awards or retrospective due diligence checks;
· lack of documentation around key procurement decisions including how conflicts of interest are identified and managed.”
The PPN also highlights the need to keep a robust audit trail of the decision making.
When relying on the urgency exemption, even though it is not required by the regulations, the PPN suggests that contracting authorities should consider some form of advertisement, running an informal competition and/or undertaking due diligence on the supplier market before making a direct award. Such an approach can have the benefit of allowing the authority to hold discussions with more than one supplier and potentially secure better value for money.
As we have discussed in podcasts and webinars, contracting authorities should consider the extent to which issues related to Covid are now foreseeable, and therefore whether the urgency exemption can be properly justified.
Hempsons’ specialist, integrated procurement team can advise you on the issues raised or any other procurement issues.
If you have any questions regarding this then please do get in touch with Oliver or Andrew.
|Oliver Crich, partner
|Andrew Daly, partner
Date: 8 February 2021