COVID-19: Public Sector options in Public Procurement

The outbreak of COVID-19 means that the procurement requirements and priorities of many public bodies have transformed rapidly, particularly for those public bodies tasked with responding to the current crisis. The need for certain supplies and services to be delivered in high volume and at short notice poses particular challenges for public bodies that are subject to the public procurement rules. Likewise, changes in strategic objectives and resourcing decisions in light of the crisis, and disruptions to existing supply chains means exiting contracts or ongoing procurement processes may need to be ended or modified.

The European Union (Award of Public Authority Contracts) Regulations 2016 (S.I. 284/2016) (the “Public Contracts Regulations”) provide several non-standard options for public body contracting authorities to overcome these difficulties.  An information note published by the Office of Government Procurement indicates that the outbreak of COVID-19 can be deployed as a reason to justify the use of these alternatives, though their precise application will depend on the circumstances of the contracting authority and on the subject matter of the contract.

1. Changes to contracts already procured

Extending or modifying existing contracts – increases of up to 50% in the total value of products and services supplied under existing procured contracts are permissible in certain circumstances under Regulation 73 of the Public Contracts Regulations. The increased demand must have been unforeseeable for a diligent contracting authority at the time of the contract and the modification must not alter the overall nature of the contract. 

Blanket orders (“call-offs”) – blanket orders can be placed under Dynamic Purchasing Systems or existing Framework Agreements where there is a recurring need for expendable goods to be bought in large quantities, providing for multiple deliveries at pre-agreed pricing.

2. Procuring new contracts

Direct award of contracts – direct awards without prior publication of a tender can be made in cases of genuine extreme urgency not attributable to the contracting authority, and brought about by unforeseeable events. These awards are made under Regulation 32 of the Public Contracts Regulations and are only permissible in certain circumstances.  

Using accelerated procedures – open, restricted and competitive procedures can be accelerated in situations of urgency where compliance with the standard procurement timelines is not possible or practical. It is possible run an accelerated open procedure to the conclusion of a contract in as little as 29 days (15 days for receipt of tenders plus the minimum 14 day standstill period). “Light touch” regime – certain health, social and related contracts for services with a value less than €750,000 can benefit from less onerous procurement rules. Although these contracts must be advertised, in the OJEU, and contract award notices must be issued, there is no requirement to use the standard procurement procedures.

3. Procurement procedures already in progress

Abandoning a process – Contracting Authorities have a broad discretion to abandon procurement processes where this is expedient and in the public interest, subject to some limitations. The contracting authority has an obligation under Regulation 55 of the Public Contracts. 

4. Challenges to contract awards

Procurement procedures conducted at speed are likely to invite legal challenges to awards. Particular risks include hastily drafted tender documents, ill-considered award criteria or assessments, and inadequate reasons given to unsuccessful tenderers. Applicants are entitled to bring a judicial review challenge to above threshold contracts under Order 84A of the Rules of the Superior Courts, or by standard judicial review proceedings in the case of below threshold contracts.

Applicants have 30 calendar days from when it was notified (or knew or ought to have known of the alleged infringement) to initiate their proceedings. Although the Irish courts are working on a significantly scaled back schedule during the COVID-19 crisis, the standard time limit for bringing proceedings currently remains in force.

For further information or advice, please contact Fergal Ruane or Mona Costelloe in the ByrneWallace Litigation and Procurement Teams. 

Please note that the content of this summary does not amount to professional advice. Legal and tax advice should be sought in respect of specific queries. The COVID-19 situation is evolving rapidly and this update is provided on the basis of information available as at 1 April 2020.