PPN 0220 Webinar Slides 15 April 2020 - Amazon S3...1 PPN 02/20 Supplier relief due to COVID-19 Subhead to go here CORONAVIRUS UPDATE Today’s session Understanding and applying PPN

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PPN 02/20Supplier relief due to COVID-19Subhead to go here

CORONAVIRUS UPDATE

Today’s sessionUnderstanding and applying PPN 02/20

Presenters:James Wood-Robertson, Nicholas Iliff and Jennifer Clarke

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What types of contract? Who does it apply to? When does it apply?

Purpose of PPN 02/20

‘to ensure service continuity during and after the current coronavirus, COVID-19 outbreak. Contracting authorities must act now to ensure suppliers at risk are in a position to resume normal contract delivery once the outbreak is over’

CORONAVIRUS UPDATE

Actions Required

Be proactiveDon’t wait until you are contacted

by suppliers at risk

Act now & reconcile later‘Contracting authorities must act now’

Put in place the most appropriate payment measures

Avoid force majeure if you can

‘Ensure business continuity is maintained wherever possible’

‘Contracting authorities are not bound to accept a supplier’s claim for force

majeure and can resist it’

‘All contracting authorities should urgently review their contract portfolio’

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Transparency

‘Suppliers should agree to act on an open book basis and make cost data available to the contracting authority during this period’

Collaboration

We’re all in this together: suppliers should ‘flow down funding to their subcontractors’

Assurances

Chancellor of the Exchequer on 20 March: ‘the first part of our plan is to protect people’s jobs’. Suppliers should therefore ‘continue to pay employees’

Impressive picture and creative slogan here

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What should you expect from suppliers?

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What relief should be granted?• Is the supplier at risk? See FAQs:

• at the discretion of the Contracting Authority• where appropriate, should be on a case-by-case basis• expectation is that the ‘majority of suppliers will be at risk’ but ‘clearly suppliers that are not

impacted by COVID-19 do not need to benefit from advantageous terms’• the goal is to:

• ensure service continuity• protect infrastructure, supply chains and jobs

• When? The requirement is to ensure service continuity during and after the crisis• What relief should be granted? Does it require payment in full?• Due diligence: you should still undertake basic due diligence checks as normal before

payment is released BUT you should ‘exercise more flexibility’

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How do we capture what is agreed?• Protect yourself and document the basis of any agreed relief• Formally document it through contractual variations:

• FAQs: ‘changes, or variations, to contracts should be agreed in accordance with the change control clauses contained in the contracts and documented and agreed by both parties’

• Draft the variations tightly and protect the authority’s position• Use experienced in-house and, if required, external legal support

• Ensure compliance with procurement law• Guidance on use of Regulation 72 in PPN 01/20 – understand the limitations• Keep a written justification of the use of Regulation 72 and your compliance with it• Publish OJEU notices where any modifications or extensions have been made

• Develop an efficient process• Use experienced support as required• Consider use of model terms that have already been developed

CORONAVIRUS UPDATE

Complex payment structures

‘Open Book Interim Data’

Supply chains are not always linear

AuthoritySupplier

SubcontractorsInvestorsFundersInsurersAdvisors

Complex control structures

Different sources of business

support

Project companies and supply chainsImpact and engagement across the whole supply chain

Ensuring the relief is flowed down – that ProjectCo / principal contractor is acting in the best interests of the entire supply chain with continuity of service (during and after the current coronavirus

outbreak) being the overriding goal

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What about funders?• What consent is needed to any changes to the contracts?• What is the impact on any financing arrangements?

• private debt in PPP• private investor money• the ‘profit element’• financial models—long-lasting consequences• data

• MIPT: ‘all interest, expenses and any other third-party financing costs incurred in relation to the provision of the [Services]’

• ‘Continuity during and after the current coronavirus outbreak’

CORONAVIRUS UPDATE

www.floraladdress.com

Managing pressuresManaging political, business and public pressure—from central government, members of the particular authority, other business groups and lobbyists, and the public

The bigger picture

Uncertainty

Continuity

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Many schemes

Many interests

Little time

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Thank youIf you have any queries, please contact us:

James Wood-Robertson: [email protected]

Nicholas Iliff: [email protected]

Jennifer Clarke: [email protected]

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