As a result of the COVID-19 pandemic the supply of goods or services to public bodies under existing contracts has in certain cases needed to be reduced, interrupted or adjusted due to, for example, supply chain issues, a drop in demand or incapacity to fulfil the contract due to UK government restrictions in place. As the UK government turns towards its recovery strategy, we look at: how public bodies might deal with risks to continuity of supply of critical services, and begin the transition towards new, sustainable, operating models; and how this might impact suppliers.
As discussed in our previous public procurement briefing, the UK Cabinet Office issued guidance for public bodies (or "contracting authorities") in March 2020 regarding relief that could be granted to suppliers (e.g. continued payment in the absence of supply, or variations to contract requirements) to ensure service continuity during and after the COVID-19 pandemic (the "Supplier Payment Guidance").
The UK Cabinet Office has since published a further policy note which updates and builds on the Supplier Payment Guidance (the "Recovery and Transition Guidance"). Taking effect from 1 July 2020, the new guidance focuses on the steps contracting authorities should take vis-à-vis their suppliers with a view to exiting any supplier relief arrangements put in place to ensure service continuity and managing the transition to new longer-term operating models. The Recovery and Transition Guidance is not intended to replace the Supplier Payment Guidance, and contracting authorities should continue to follow the Supplier Payment Guidance where appropriate.
Key points from both sets of guidance (the "Guidance") are summarised below.