Don’t be fooled by the marketing hype of our competitors; tendering opportunities have dried up. COVID-19 has hit at the traditionally quiet time of Easter and, combined with the start of the financial year (new budgets, new priorities), has created a perfect storm for a blow to private-sector firms bidding for public-sector contracts. There is not much out there.
What we know for certain is that it is not going to get much better any time soon.
Procurement policy note – responding to COVID-19
Last week, the Cabinet Office issued “Procurement Policy Note – Responding to COVID-19” (Information Note PPN 01/20). At only seven pages long, is well worth reading.
The key points to note are listed below. Within the actual document, each item is expanded upon and given context and explanation. The five commercial actions now available are:
- direct award due to extreme urgency (regulation 32(2)(c)
- direct award due to absence of competition or protection of exclusive rights
- call off from an existing framework agreement or dynamic purchasing system
- call for competition using a standard procedure with accelerated timescales
- extending or modifying a contract during its term.
What does this mean in practice? Broadly, we would anticipate that in the short-to-medium term there will be more direct awards, accelerated procedures and contract extensions. We were informed this week that Crown Commercial Service frameworks have been extended by 12 months, but at the time of writing have been unable to corroborate if this is correct. However, it makes perfect sense. The public sector, on all our behalves, is dealing with a national crisis the like of which we have not experienced since World War II, and it is natural that the country focuses on the associated challenges.
Much will depend on the duration and impact of the crisis, but our best guess is that many new contracts will be delayed, while many existing contracts will be extended.
For most of our clients, this is not necessarily a bad thing. If a contract is due for renewal in the next four to ten months, it may be that the procurement process is delayed, or even that processes that are already underway are shelved. This will allow you to continue to benefit from the income the existing contract generates. Our advice, though, is that until such a time that there is a national, regional or local announcement regarding public sector procurement, you should continue to prepare on the assumption that a contract notice will be published and a tender process undertaken.
Tendering post COVID-19
One thing we can guarantee is that, when tendering is back to normal, competition will be even more intense, as many firms will need to replace lost income. From 2009 until around 2013, many of the larger firms who had lost work due to the recession or who were looking to grow began to bid for smaller contracts, meaning our SME clients had to fight much harder for every opportunity.
Make sure you are ready for this and use these quieter weeks and months to reflect on areas where you can add value – and don’t forget about social value! If your teams are working with the community during this challenging time, make sure you record it. We can leverage this activity within your tenders to demonstrate how socially responsible you were during the crisis and how you drew upon your existing relationships for the good of the local community.
It’s not all bad news. Even though this slowdown has affected Executive Compass, rest assured that our core team will be here to help retain existing or win new contracts, whether that’s now, or in three, six, or 12 months.
Plus, if you do have existing contracts, the Cabinet Office has also issued policy note “Supplier relief due to COVID-19”. The note provides information and guidance to public bodies on payment of their suppliers. The core message to the public sector is for them to support you throughout the crisis by making sure you are paid on time to safeguard cash flow and jobs so that services continue to be delivered. The note provides guidance on accelerating payment of invoices and includes areas such as payment in advance and interim payments.
It’s a mixed bag in difficult times, but the important thing is that it is not all bad news. Stick in there, and we will see you on the other side.
Neil