Local Authority Commercial Contracts and Procurements in a Covid-19 World

The Government has provided vital guidance to local authorities on how to comply with procurement rules during the COVID-19 crisis. This is currently in the form of two Procurement Policy Notes ("PPNs") issued by the Cabinet Office last week. Both have immediate effect. They offer important guidelines on the continued operation of procurement legislation, especially the Public Contracts Regulations 2015 ("PCR 2015"), and wider best practice.

PPN 01/20 deals with mechanisms for urgent procurement by central and local government, education institutions, NHS bodies and other contracting authorities. It addresses: (1) direct awards; (2) call-offs; (3) standard procedures with accelerated timescales; and (4) extensions or modifications of existing contracts.

PPN 02/20 concerns special measures that local authorities should take to support their usual service providers, including waivers, variations, extensions and price adjustments. It also encourages normal and prompt payment, even if service delivery is disrupted or temporarily suspended. As a condition, suppliers are expected to act on an 'open book' basis, provide cost information and pay employees and sub-contractors. Local authorities are also encouraged to provide relief against contract terms, rather than accepting force majeure or frustration claims.

This article summarises the effect of the two PPNs and highlights best practice points. It also comments on force majeure clauses and frustration as they apply to local authorities.

The authors have also commented on further guidance promulgated since the PPNs in two articles which are available on our website:

• Fraud control in emergency management: COVID-19 guidance.
• Important updates to PPN 02/20: Procurement guidance for contracting authorities.

You can read the full post on our Commercial, Construction & International Arbitration Blog here.