knowledge | 15 April 2020 |
COVID-19: European Commission Publishes Guidance on the use of the Public Procurement Framework in the Crisis
On 1 April 2020, the European Commission published a Communication (view here) containing guidance on how the EU public procurement framework can and should be used in the emergency situation caused by the COVID-19 crisis.
The Communication acknowledges that COVID-19 has created a health crisis requiring “swift and smart solutions and agility in dealing with an immense increase of demand for similar goods and services while certain supply chains are disrupted” and provides welcome guidance on how to handle procurement quickly during an emergency.
Options and flexibilities under the public procurement framework
The Commission Guidance focuses on the “options and flexibilities” already “available under the EU public procurement framework for the purchase of the supplies, services, and works needed to address the crisis”. The Communication stresses that the current framework provides all necessary flexibility to public buyers purchasing goods and services as quickly as possible – provided, of course, that the purchase is directly linked to the COVID-19 crisis.
Public bodies have several options to consider, including:
- First, consider use of accelerated procedures in cases of urgency (considered below).
- If an accelerated procedure would not suffice, consider use of the negotiated procedure without prior publication in cases of extreme urgency (this procedure effectively permits a direct award of contract without a tender competition) (considered below).
- The guidance also urges public buyers to look at "alternative solutions" and to engage with the market, including by sending representatives to countries that have the necessary stocks and can ensure immediate delivery, and contacting potential suppliers to agree to an increase in production or the start or renewal of production.
- Further, public buyers are encouraged to explore innovative solutions to meet their needs, including working with entrepreneur's networks which could propose innovative solutions.
- The guidance also encourages public buyers to procure jointly and to take advantage of the Commission’s joint procurement initiatives. Ireland is already participating in the EU’s joint procurement agreement for the purchase of personal protective equipment.
Where urgency dictates, a "substantial reduction" can be applied to the general deadlines for the open and restricted procedures. These deadlines can be shortened to 15 days for open procedure procurements, and 15 days, then 10 days for the restricted procedures. Public bodies should however bear in mind that the 14 day standstill period under Irish law still applies even for accelerated procedures. Including the standstill period, an accelerated open procedure would therefore actually involve a timeframe of 30 days from start to finish.
There may be instances therefore where the timeframes under an accelerated procedure are too restrictive for public bodies that need to purchase essential goods and services immediately, and they may need to consider instead using a negotiated procedure without prior publication.
Negotiated procedure without prior publication
The negotiated procedure without prior publication can only be used in very limited circumstances, including, “insofar as is strictly necessary where, for reasons of extreme urgency not attributable to the contracting authority and brought about by events unforeseeable by the contracting authority, the time limits specified for the open procedures or restricted procedures or competitive procedures with negotiation cannot be complied with”.
As the negotiated procedure without prior publication (or direct award) is an exceptional procedure, National and EU courts have consistently underlined that its grounds are to be interpreted narrowly. Public bodies seeking to use a negotiated procedure without prior publication must satisfy themselves that the exceptional circumstances are indeed present and will have to maintain a written record to justify their choice of such a procedure.
In this regard, the Communication is clear that the specific needs for medical equipment and infrastructure (including ventilators) could not be foreseen and planned in advance: “The number of COVID-19 patients requiring medical treatment is rising daily and, in most Member States, is expected to increase further until the peak will be reached. These events and especially their specific development has to be considered unforeseeable for any contracting authority. The specific needs for hospitals, and other health institutions to provide treatment, personal protection equipment, ventilators, additional beds, and additional intensive care and hospital infrastructure, including all the technical equipment could, certainly, not be foreseen and planned in advance, and thus constitute an unforeseeable event for the contracting authorities.”
Public bodies must also be able to establish a "causal link" between the unforeseen event and the extreme urgency. In this regard, the Communication helpfully outlines that, “For the satisfaction of the immediate needs of hospitals and health institutions within a very short timeframe the causal link with the COVID-19 pandemic cannot reasonably be doubted”.
The Commission also confirms that there are no procedural constraints for use of the negotiated procedure without prior call for competition, stating that, “public buyers may negotiate directly with potential contractor(s) and there are no publication requirements, no time limits, no minimum number of candidates to be consulted, or other procedural requirements. No procedural steps are regulated at EU level. In practice, this means that authorities can act as quickly as is technically/physically feasible – and the procedure may constitute a de facto direct award only subject to physical/technical constraints related to the actual availability and speed of delivery”.
The Communication concludes that the negotiated procedure without prior notice is only to be used for stop gap solutions, and should not be used for long term solutions that could be achieved via framework agreements, awarded through regular procedures (including accelerated procedures).
The Communication provides clear and practical guidance, reminding public bodies of the flexibility that is already available under the public procurement framework for use in emergencies, and encourages public bodies to use it.
The Office of Government Procurement (OGP) in Ireland has also published an information note (view here) to support public bodies in managing procurements where urgency is required to deliver essential goods and/or services because of Covid-19. The guidance includes a reminder that, where the procurement is unaffected by Covid-19 related issues, public bodies should ensure their procurements use competitive processes to ensure value for money, transparency and equal treatment.
Also contributed by Eoin Creaner.
This document has been prepared by McCann FitzGerald LLP for general guidance only and should not be regarded as a substitute for professional advice. Such advice should always be taken before acting on any of the matters discussed.