Procurement Policy Notes (PPNs) – Developing Public Procurement During A Pandemic And In The Midst Of Brexit – Government, Public Sector

While public procurement has clearly taken a high-profile role
during the COVID-19 pandemic (not always for the best of reasons)
an important point to make at the outset is that the law around
public procurement has not in fact needed to change at all to adapt
to the urgent requirements presented to us all by the pandemic. The
Public Contracts Regulations 2015 (PCR) were considered to be
sufficiently broadly drafted to allow for the unforeseen and urgent
circumstances that everyone faced during the pandemic.

However, as we know, the Cabinet Office periodically issues
guidance in the form of PPNs to the public sector, as a means to
direct interpretation of how PCR should be operated in practice.
This remains guidance, but is generally accepted as good practice
to be followed. Everyone will remember PPN 01/20, which was
published in mid-March 2020. This simply highlighted the routes to
contract awards that were already set out in PCR, allowing for
rapid direct awards in circumstances that were directly affected by
the pandemic, and which were genuinely ‘unforeseeable’. It
is worth pointing out that PPN 01/2020 made clear the point that
those provisions of PCR should only be used to award contracts of a
scope and duration which were ‘absolutely necessary’. Use
of the highlighted mechanisms moving forward are unlikely to be
justifiable any longer given that we have been living and breathing
the impacts of the pandemic for over seven months already.

Subsequent PPNs were issued, in particular PPN 02/2020 and then
PPN 04/2020, which were aimed at permitting a higher degree of
flexibility for public sector buyers to be able to adjust service
deliveries to flex around less predictable requirements, but at the
same time to permit more rapid payment to contractors by public
sector bodies to maintain liquidity. These were seen as helpful
guides to allow contracting authorities to negotiate day-to-day
variations in services/service levels and payment regimes as
circumstances altered daily.

Social value – New requirements in evaluation

One of the most recent PPN guidance notes issued (One of the
most recent PPN guidance notes issued (PPN 06/2020), which currently only applies to
central government departments (those listed in Schedule 1 of PCR,
including, for example, NHS trusts and the NHS Business Services
Authority), their executive agencies and non-departmental public
bodies, from the date of publication (24 September 2020), requires
affected contracting authorities to explicitly evaluate social
value in procurements ‘…where the requirements are related
and proportionate to the subject-matter of the contract.’
However, it is not a requirement if this would place an
unreasonable burden on the contracting authority’s procurement
team, or upon suppliers. It is not, therefore currently mandated in
all procurements moving forward.

This marks a relatively significant shift from the current
provisions of the Public Services (Social Value) Act 2012, which
simply requires contracting authorities to consider social value
matters (economic, social and environmental wellbeing of the
relevant area) when putting together award criteria for a
procurement for public sector contracts. As we have experienced
since the introduction of the 2012 Act, its provisions were largely
overshadowed by PCR coming into force particularly, since its
provisions were seen to be encapsulated indirectly within the
requirements set out in PCR, on top of which the 2012 Act itself
had no sanctions for a failure to explicitly comply with its terms.
It is fair to say that the 2012 Act has had very little real impact
to date.

In addition, PPN 06/20 requires, from 1 January 2021, a newly
developed social value model to be used in all procurements to
which PCR would otherwise apply as a means to foster post-COVID
social and economic development through procurements. The idea is
to standardise how ‘social value’ will be defined moving
forward. However, commercial teams will retain flexibility in
deciding which outcomes from the social model should be applied to
their particular procurement, to ensure relevance and
proportionality. In addition, a minimum weighting of 10% of the
total available scores should be applied to social value to ensure
it can become a differentiating factor in bid evaluation.

Further guidance is expected from the Cabinet Office in due
course, but currently training workshops are available via
[email protected].

Brexit

Clearly Brexit will present its own issues later in the year,
but as things currently stand, with only one month left, there is
no clear direction of travel with negotiations with the EU as to
what will happen once the transitional period expires under the
Withdrawal Agreement.

Once we have further clear guidance on the impact of Brexit on
public procurement we will keep you informed, but until then it is
safest to assume that things will remain largely unchanged.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.