Coronavirus (COVID-19)—Cabinet Office publishes procurement guidance for construction contracts

Coronavirus (COVID-19)—Cabinet Office publishes procurement guidance for construction contracts

The Cabinet Office has updated Procurement Policy Note 02/20: Supplier relief due to COVID-19 (PPN 02/20) to include guidance notes and frequently asked questions specific to construction contracts, along with model deeds of variation for the NEC3 Engineering and Construction Contract and the JCT Design and Build Contract 2016.

PPN 02/20 sets out information and guidance for public bodies on payment of their suppliers to ensure service continuity during and after the current coronavirus outbreak. It was first published on 20 March 2020 (see: Procurement Policy Note on supplier relief aims to ensure service continuity in public contracts during and after coronavirus (COVID-19), LNB News 23/03/2020 120).

Additional guidance was added on 6 April 2020 specific to construction contracts, and should be used by all contracting authorities to which PPN 02/20 applies.

The guidance is designed for existing construction contracts, and confirms that contracting authorities should continue to pay suppliers at risk due to coronavirus on a continuity and retention basis until at least the end of June 2020. It sets out the various forms of relief an authority may agree with a supplier in order to deal with business disruption caused by coronavirus, namely: 

• accelerated payment of invoices 

• certification of interim valuations where work has not been undertaken, based on previous valuations 

• amendment to existing payment mechanism to make more regular payments or reorder existing payment schedule 

• the provision of advance payment(s) to the supplier

The model deeds of variation allow a supplier, which the authority has identified as at risk because of coronavirus, to obtain relief in the manner agreed. Authorities should seek legal advice to ensure that the amendments to existing contracts are consistent with the contact they seek to vary.

Source:  Procurement Policy Note 02/20—Supplier relief due to COVID-19

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