The procurement regulations permit in cases of “extreme urgency” for a contracting authority to directly appoint a contractor to provide essential works, services and suppliers under the negotiated procedure without a call for competition.
There have been many cases where extreme urgency has been argued but to date but none have been successful. At the end of 2018, the government tried to rely on this exception to award contracts to ferry operators for the provision of additional freight capacity between the UK and continental Europe in the event of a no-deal Brexit. Eurotunnel brought a procurement challenge seeking damages arguing that the strict conditions for relying upon “extreme urgency” were not met and that the consequences of a no-deal Brexit were foreseeable. The case ultimately settled out of court.
Under regulation 32(2)(c) of the Public Contracts Regulations 2015 (PCR), it is necessary to demonstrate:
- the time limits for the use of the open or restricted procedures or competitive procedures with negotiation cannot be complied with due to extreme urgency. For example, there are other provisions under the PCR for use of reduced timeframes due to urgency which would reduce the time period to carry out a tender process to around four to six weeks, which contracting authorities will need to consider first.
- the events giving rise to the extreme urgency were unforeseeable by the contracting authority. As mentioned above, Brexit was a foreseeable event.
- the circumstances must not be attributable in whole or in part to the contracting authority. Other cases involving contracts for motor vehicle registration software and equipment for a thermal energy generation plant have failed on this limb due to the fact that the contracting authority had delayed in taking action after the event giving rise to the urgency arose.
The impact of coronavirus (also known as COVID-19) is being described as a national emergency. In our view these are exactly the type of circumstances that ought to qualify under the exemption. Clearly contracting authorities will need to demonstrate that the procurement is directly linked and limited to the extreme urgency. For example hand sanitisers or additional IT equipment and software to enable home working might be justifiable, but business as normal procurements will not be. Contracting authorities should also keep a detailed audit trail of their decision making process.
The above reflects guidance as at 20 March 2020. We will continue to update this as the situation develops.
Postscript
At the time of publication, Cabinet Office has just released a new procurement policy note confirming that the “extreme urgency” exemption can be used as one of the tools to respond to COVID-19. Please see this link for further guidance.
