Earlier this year, the Cabinet Office issued procurement policy notes (PPNs) outlining measures which could be taken by public sector contracting authorities in the light of the COVID-19 outbreak. PPN 02/20 and PPN 04/20 included advice on ways for contracting authorities to support “at risk” suppliers, to ensure business and service continuity and to protect jobs.

We published articles and podcasts on these, and related PPNs, at the time. You can view these articles via the links opposite.

The Department for Education (DfE) has now issued updated guidance aimed at helping post-16 educational establishments in higher education and further education, including sixth-form colleges, to understand how PPN 02/20 and PPN 04/20 applies to them.

The updated guidance (18 September 2020 update) focusses on two important areas:

  1. helping post-16 educational establishments to determine whether they are a “contracting authority” and therefore whether the PPNs apply to them, and
  2. providing them with some overarching principles and guidance on how they may choose to review and respond to supplier requests within the scope of the PPNs and how to work with suppliers to exit from any support before 31 October 2020.

On the first question of whether or not a post-16 educational establishment is a “contracting authority” this guidance points to the breadth of coverage of that concept, noting first that certain HE and FE establishments that derive the majority of their income from state funding “will likely be ascribed the status of a contracting authority”. It then goes on to refer to the definition in the Public Contracts Regulations 2015 (PCR) of “bodies governed by public law” which are contracting authorities for the purposes of the PCR and these PPNs.

It concludes with a comment that some HE and FE may be delivered by voluntary organisations, community groups and social enterprises (VCSE) sector and derive more than 50% of their funding from state resources, in which case they may be contracting authorities and fall within the scope of the PPNs. The guidance advises that in the case of doubt, educational establishments may wish to seek their own legal advice.

On the second question, the DfE outlines the 5-stage approach it has chosen to take to evaluate its own suppliers who fall within the scope of the PPNs. The 5-stage approach involves: assessment of whether the supplier has considered alternative measures such as use of the government’s business support schemes; assessment of whether they are a critical supplier to the organisation; considering commercial interventions available – with examples; and possible financial interventions. The outline is intended to provide educational establishments with some overarching general guidance and principles as to how they could choose to implement the PPNs.

The DfE guidance emphasises that any commercial or financial changes or variations to contracts should be agreed in accordance with change control clauses contained in the contracts and documented, even if this takes place retrospectively. It also notes the importance of working in partnership with the supplier on agreeing an exit route and transition planning. It emphasises the need to ensure that all necessary financial and governance controls are applied, compliance with transparency requirements set out in the PPNs and the importance of record keeping.

If you’d like to know more, or you need our advice on these issues, please do not hesitate to contact us.

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