We’re all aware that we are living through some unprecedented times. The emergence of the coronavirus has had, and will continue to have, a serious impact on public health and the economic wellbeing across the UK. This turbulent time means the vast majority of people will feel the effect, both personally and economically. As of the date of this article, the UK is in lockdown. This means that many businesses will face restrictions on their day-to-day activities and, despite a huge effort by the chancellor to mitigate this impact, SME’s particularly will undoubtedly be anxious about their future. Doubts over the security of the income they have coming in, their ability to carry out work through lost productivity or a lack of infrastructure to allow people to work from home, and the mounting outgoings like staff salaries all put pressure on smaller businesses during this difficult time.

Planning for the future becomes tricky when faced with so much uncertainty. Many of the SMEs I’ve dealt with dedicate at least a portion of their time and energy to business development and exploring future opportunities. However this has obviously taken a bit of a back seat for those businesses who are struggling to maintain business-as-usual. What’s more, the government has issued updated guidance and amendments on to the Public Contracts Regulations (the laws governing how public bodies like councils and NHS Trusts buy goods works and services). These amendments have given emergency powers to public bodies to relax some of the rules around procurement and tendering so that they can have the necessary contracts in place without following overly burdensome tendering procedures. This article will discuss the changes the government has made to the rules and the potential adverse effects this will have on SMEs, so that you know where you stand and what you might expect in the coming months regarding tenders.

The Public Contracts Regulations 2015 is the law dictating how councils, central government, NHS Trusts and other public bodies must conduct tenders and award contracts. The purpose was to ensure competitions for contracts are fair, open and transparent. In summary this means:

FAIR:  ensuring all business have equal opportunity to bid for and win contracts so no business is unfairly advantaged/disadvantaged during the process. This, importantly, means bidders are scored independently and often blindly, and win contracts on merit and value without being discriminated against. It also means bidders have a reasonable amount of time to prepare their tender submission.

OPEN: opportunities are published publicly, particularly higher value contracts. No bidders are to be excluded from participating unless they fail to meet the reasonable requirements of the contract.

TRANSPARENT: scoring mechanisms are disclosed in advance and results can be scrutinised and challenged by bidders should the contracting authority fail to follow its own procedure. Likewise, contract awards are published with contract values for all to see.

In March 2020, the UK government published an update to these regulations to account for the unusual and disruptive crisis we all face. For those of you that are interested, this policy note is publicly available to read here.

At only 7 pages, it’s worth taking a look at because we will only be providing a summarised version of the key messages within it.

These updates provide contracting authorities with additional powers, allowing them to:

• Directly award contracts to suppliers without competition, providing certain tests are met
• Extend existing contracts (again when certain tests are met)
• Shorten the timescales bidders have to prepare their bids to speed up the contract award process. For most procurement exercises, this will see the time available to write a bid drop from 30 days to 15 days.

In addition, the policy note encourages more call-offs from existing frameworks and DPSs (dynamic purchasing systems).

A contracting authority may award or extend a contract without advertising an opportunity or competing the contract through a tendering process if:

• They face an unforeseeable emergency situation as a result of Covid-19, where a competitive process would cause unnecessary delay and pose a risk to health, safety, security etc
• There are no suitable frameworks or DPSs in place to call-off from
• There are no other suppliers in the market to run a competitive process, providing the requirements of the contract is not overly specified
• Extensions do not increase the scope, or nature of the contract and the price is not increased by more than 50% of the original contract value

The consequence of this amendment to the legislation will likely see more direct award contracts, therefore fewer tenders advertised. You’ll also likely see a lot more contract extensions and, where competition is needed, more call-offs from existing frameworks. Unless you already have a place on a framework, you may miss out on these opportunities.

Where tenders are run in the good old fashioned way, published in advance and open to all bidders, you may see a reduction in the time available to prepare you bid, although it is our opinion that this will be less common than you might expect. Contracting authorities must consider how reasonable it is to ask the market to prepare a quality tender submission in just 15 days, whilst simultaneously trying to navigate the difficulties faced as a result of the pandemic.

It will probably mean that the smaller number of published tenders will be more competitive. It’s a simple case of more suppliers going for fewer tenders and so it is vital that you dedicate the appropriate time and resource necessary to pull together your very best bid.

With all said and done, this doesn’t impact everyone equally. If you already have a government contract, chances are they will be looking for ways to extend it. You’ve already managed to get your foot in the door and, given these new powers, it will be easier for councils to justify an extension to your contract.

Likewise if you’re already on a framework, then you’re in a great position. You may likely see an increase in the number of invitations to tender or perhaps even offered contracts without competing at all. This will entirely depend on the council’s appetite for risk and the eligibility of your service with respect to the aforementioned tests. Frameworks themselves will likely be extended so you could see your services being purchased for a lot longer than previously anticipated.

Importantly, if you have a unique service offering that makes you eligible for direct award, then you are in a great position to approach contracting authorities and propose your services. This is a rarity but if you are able to think of unique selling point that your competition doesn’t have, this may be enough to convince a council to skip the tendering process and directly award a contract to you.

Finally, if you’re not on any existing frameworks, and do not currently have any contracts with any public bodies, you can still join DPSs. These are very similar to frameworks with the exception that they are open to new members joining at any time. Once the competition for a framework has closed, the winning bidders are locked in for the life of that framework. A DPS, on the other hand, has an open door policy. Have a look on TED and Contracts Finder for any DPSs open that you may want to join. This will increase your odds of being invited to tender when opportunities become available.