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April 06, 2020 - International Public Procurement, Coronavirus

Guidance on the EU Procurement Regime During COVID-19 Crisis

Updated Coronavirus (COVID-19) Guidelines For Employers

The European Commission has issued guidance on how the EU public procurement framework can and should be used during the COVID-19 crisis.

While the Commission has not relaxed any of the existing EU procurement rules, it has clearly emphasized the flexibility that already exists under the regime for the purchase of the supplies, services, and works needed to address the crisis.  The guidance published on 1 April 2020 (Communication from the Commission 2020/C 108 I/01) stresses that the European public procurement framework already provides all necessary flexibility to public buyers to purchase goods and services as quickly as possible – provided, of course, that the purchase requirement is directly linked to the COVID-19 crisis.

EU public bodies have several options to consider, including immediate direct awards in case of extreme urgency.  Despite the UK having left the EU on 31 January 2020, the same approach applies in the UK under the rules already implemented into UK law pre-Brexit.

First, in cases of urgency, any EU-based public body can use existing possibilities to reduce the applicable bid deadlines, in order to accelerate procurements based on the “open” or “restricted” procedures that are laid out under the EU regime.  For open procedures, a deadline of 35 days applies for the submission of tenders; and, for restricted procedures, the normal deadline is 30 days for the submission of requests to participate, followed by an additional deadline of 30 days for the presentation of tenders.  These deadlines can be shortened to 15 days for open procedure procurements, and 15 days, then 10 days for the restricted procedures.

However, if even that flexibility is not enough, Article 32(2)(c) of the main procurement directive () allows a public body to conduct a negotiated procedure procurement without a publication of a contract notice “where, for reasons of extreme urgency brought about by events unforeseeable by the contracting authority, the time limits for the open or restricted procedures or competitive procedures with negotiation cannot be complied with”.  Whether or not the circumstances justify ditching the open or restricted procedures and going straight to a negotiated procedure will have to be assessed on a case-by-case basis.

While the option for moving to a direct negotiated procurement has always been popular with public bodies, the Commission has always downplayed it.  However, even at this point, the Commission has stated that this type of contract award is only appropriate to cover the gap until more stable solutions can be found, such as framework contracts for supplies and services awarded through regular procedures (including accelerated procedures).

In fact, as the Commission outlines, the existing rules also allow a direct award to a pre-selected provider as long as that provider is the only one able to deliver the required supplies within the technical and time constraints imposed by the extreme urgency.  Some Member State governments (for example, Germany) have already issued their own additional guidance at a national or regional level, backing the option to conduct negotiations without going through the full advertisement/open tender process.  Some national guidance includes scenarios to negotiate with just one bidder and reduce deadlines even further – down to as little as just one day, or the same day.

Direct contract awards are most likely to occur for the procurement of direct COVID-19-related items, such as personnel protective equipment and medical devices.  But the guidance doesn’t rule out use of the alternative processes for wider scope (for example, to purchase mobile IT equipment to provide government employees at all levels with the devices necessary to keep departments and state-owned entities up‑and‑running while key personnel is working remotely).

For suppliers that are ignored and can’t compete for certain contracts that are directly awarded, it may be difficult to seek quick legal protection since the courts and appeal bodies dealing with public procurement issues are, to a certain extent, working with limited resources – and, of course, also because the urgency argument will currently likely prevail.  Nevertheless, private companies should monitor the market and intervene in cases where any direct awarding is clearly unrelated to urgencies triggered by the coronavirus crisis.

The Commission guidance also encourages public buyers to consider looking at alternative solutions and engaging with the market, including to consider contacting suppliers in and outside the EU by phone, e‑mail, or in person, or hiring agents that are better positioned to identify procurement channels for goods currently demanded by, more or less, every government in the world.

In practical terms, public buyers for COVID-19-related supplies will likely want to pursue a multi-stage strategy.  First, for their immediate and projected short-term needs, they should fully exploit the existing flexibilities of the procurement regime, which may also mean extending existing contracts as permitted under the general EU public procurement regime and the national implementing laws.  Below the EU thresholds, where the EU directives do not apply, national and regional governments may opt to remove requirements that exist under Member State laws and regulations.  Additionally, they may be able to procure jointly and to take advantage of the Commission’s joint procurement initiatives.  In the medium term, it may be possible to use procurements with reduced deadlines – which may be a more reliable means of getting better value for money.