So what happens next….contractual arrangements post “lockdown”

Whilst the lockdown has been extended and there is currently no definitive end date, pressure is building on the Government for a formal route out. Now is therefore the time for public bodies and their suppliers to be planning their own route out by reviewing the interim contractual arrangements that have been implemented in response to the Covid-19 pandemic.

On implementation of the lockdown many organisations drew on the content of PPN 01/20 and PPN 02/20 to enter into emergency arrangements to ensure that essential goods, services or works continued to be delivered during lockdown. However, given the speed at which these changes needed to be implemented it is possible that formal variations have not been entered into, contractual change procedures have not been followed and/or requisite authorities have not been obtained. So what happens now?

The answer to this question very much depends on what the long-term intention is, how the change has been made and of course the terms of the contract. For example:

  • Has a formal variation been signed by the parties prior to the end of the lockdown?
    • if so, was it clear it was a temporary change linked to the continuation of the pandemic and not a long-term variation?
    • if not, do the parties intend to simply revert to “as was” immediately at the end of lockdown?
  • Is there a change procedure or similar in the contract and, if so, was this followed?
    • if the procedure has not been followed is there scope for either party to take action under the contract? How can this be avoided?
  • If the variation is to continue long-term, is this a permitted modification within the scope of Regulation 72 of the Public Contract Regulations 2015? Whilst PPN 01/20 suggested utilizing Regulation 72 in the immediate outbreak of COVID 19, it was also clear that any modifications must be limited to what is absolutely necessary to address the unforeseeable circumstances.
  • Are specific authorities required for the new arrangements if they are no longer temporary or an immediate response to the lockdown?

In much the same way as there is no simple route out for the country, there is no simple answer to “what happens next” and each contract will need to be considered within the context of its own circumstances.

Should you wish to explore these or other contract issues we would be pleased to offer advice and guidance.

This article is for general awareness only and does not constitute legal or professional advice. Law and guidance relating to the COVID19 pandemic is continually being updated and the law may have changed since this page was first published. If you would like further advice and assistance in relation to any issues raised, please contact us today by telephone or email  covidhelp@sharpepritchard.co.uk.

Posted in Authors, Coronavirus (COVID-19).