This document summarizes three UK government procurement policy notes (PPNs) relating to the COVID-19 pandemic. PPN 01/20 provides guidance on urgent procurement options to respond to COVID-19 needs. PPN 02/20 focuses on ensuring supplier relief and continued payment during the pandemic. PPN 04/20 builds on previous guidance and advises contracting authorities to review relief measures and work with suppliers on transition plans as the country moves towards recovery. Key recommendations include continuing prompt supplier payments, maintaining transparency, and partnering openly with suppliers.

1. © 2020 PCC
Procurement guidance issued during the Covid-19
(updated August 2020 to incorporate PPN 04/20)
Procurement policy note (PPN) 01/20 - responding to Covid-19
https://www.gov.uk/government/publications/procurement-policy-note-0120-
responding-to-covid-19
Procurement policy note (PPN) 02/20 – supplier relief due to
Covid-19
https://www.gov.uk/government/publications/procurement-policy-note-0220-
supplier-relief-due-to-covid-19
Procurement policy note (PPN) 04/20 – Recovery and
Transition from COVID
https://www.gov.uk/government/publications/procurement-policy-note-0420-
recovery-and-transition-from-covid-19

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PPN 01/20 – responding to Covid-19
• Recognises that there may be a need for urgent procurement
of goods, services and works during the pandemic
• Sets out a range of legally compliant options/ mechanisms
within the Public Contract Regulations 2015 that can be used
to secure requirements urgently
• Contracting authorities should keep proper records of
decisions and actions, including the justification for use of
particular mechanisms, as this could mitigate against the
risk of a successful legal challenge

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Options

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PPN 02/20 – supplier relief due to Covid-19
• Sets out information and guidance for public bodies on
payment of their suppliers to ensure service continuity during
and after the current COVID-19 outbreak
• Contracting authorities must act now to ensure suppliers at
risk are in a position to resume normal contract delivery once
the outbreak is over
• Contracting authorities should pay all suppliers as quickly as
possible to maintain cash flow and protect jobs

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Contracting authorities should:
• Urgently review their contract portfolio and inform suppliers who
they believe are at risk that they will continue to be paid as
normal (even if service delivery is disrupted or temporarily
suspended) until at least the end of June
• Put in place the most appropriate payment measures to support
supplier cash flow; this might include a range of approaches
such as forward ordering, payment in advance/prepayment,
interim payments and payment on order (not receipt)
Key messages

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• If the contract involves payment by results then payment
should be paid on the basis of previous invoices, i.e. the
average monthly payment over the previous three
months
• To qualify, suppliers should agree to act on an open book basis
and make cost data available to the contracting authority during
this period. They should continue to pay employees and flow
down funding to their subcontractors
Key messages

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• Ensure invoices submitted by suppliers are paid immediately on
receipt (reconciliation can take place later) in order to maintain
cash flow in the supply chain and protect jobs
N.B. Supplementary guidance is available on: Payment to Suppliers for
Contingent Workers; Model Interim Payment Terms; FAQs; and Model
Terms of Construction; plus PPN 03/20 – Use of Procurement Cards
https://www.gov.uk/government/publications/procurement-policy-note-
0320-use-of-procurement-cards-coronavirus
Key messages

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PPN 04/20 – Recovery and Transition from
COVID-19
• The note builds on the information provided in PPN 02/20.
• It continues to encourage authorities to pay providers as
quickly as possible
• It highlights the need to review any contractual relief put into
place as a result of COVID-19
• It advises contracting authorities to put transition
arrangements in place where applicable
• It is effective for the period 1 July to 31 October 2020

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Contracting authorities should:
• Review their contract portfolio, including where they are
providing any contractual relief due to COVID-19 and, if
appropriate to maintain delivery of critical services, continue or
commence measures in line with PPN 02/20
• Work in partnership with their suppliers and develop transition
plans to exit from any relief as soon as reasonably possible.
This should include agreeing contract variations if operational
requirements have changed significantly
Key messages

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• Work in partnership with their suppliers, openly and
pragmatically, during this transition to ensure contracts are still
relevant and sustainable and deliver value for money over the
medium to long term. This could include terminating a contract
which is no longer relevant or viable
• Continue to pay suppliers as quickly as possible, on receipt of
invoices or in accordance with pre-agreed milestone dates, to
maintain cash flow and protect jobs
• Maintain a comprehensive record of all decisions,
the reasoning behind key decisions and actions taken,
to support transparency and future scrutiny of
value for money
Key messages

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Support from PCC
If you have procurement queries, or to discuss how we can
support your organisation, please contact enquiries@pcc-
cic.org.uk