18 March 2020 #Public Procurement
Public bodies and bidders will be familiar with the requirements of the Public Contracts Regulations 2015, which impose obligations in respect of the advertisement of public contracts over the financial thresholds, the conduct of the tender and the award of the contract. Depending on the value and size of the contract, a typical procurement can take anything from a few months to more than a year to conclude.
Regulation 32 does however provide an exception for contracts which are required for “reasons of extreme urgency brought about by events unforeseeable by the contracting authority”. Where this exception applies and it is not possible for the time limits for the open, restricted or competitive negotiation procedures to be used as a result of that urgency, a public body may award a contract using the negotiated procedure without advertising it and following the usual procurement processes.
To date judges have interpreted the Regulation 32 exception strictly. In a 2014 case under the Scottish equivalent of the Regulations, a public body was not permitted to rely on the exception to justify the urgent purchase of salt required to de-ice roads, as the fact that larger stocks of salt would be required during a harsh winter should have been foreseen by the public body. More recently, the Department for Transport were criticised for relying on the exception in awarding a number of ferry contracts as part of its no-deal Brexit preparations, as the possibility of a no-deal exit was always foreseeable and there was still time for a proper procurement process to be run at the time the contracts were awarded.
However, the good news for public bodies in the current climate is that it is likely that Regulation 32 can be relied upon where urgent contracts are required as a result of the global Coronavirus pandemic. This new virus and its effects could not have been foreseen by public bodies, and in many cases the extreme urgency condition will be met if the contract being entered into is required in order to reduce or delay transmission. Public bodies should nonetheless be cautious in relying on Regulation 32 and ensure that clear records are kept evidencing the urgent need for the contract. These records may be needed in the event of a future challenge.