COVID-19 and Public Procurement in Ireland: Not so novel
The COVID-19 outbreak has impacted businesses and governments across the globe. Governments and the European Commission are working at speed to address and support citizens in the current pandemic. There is an increased requirement for essential goods and services (particularly from health authorities) at short notice. The EU procurement rules already provide a toolbox which Irish health authorities and other public bodies can readily use to obtain urgently required goods and services so these issues are not novel in public procurement. There are in-built mechanisms that allow for accelerated procurements and direct awards for reasons of extreme urgency. This briefing outlines a range of issues that public bodies and suppliers are facing and outlines how the procurement rules can be used to address those issues.
The procurement rules contain mechanisms for authorities to buy necessary goods and services in cases of urgency. Those mechanisms include:
(i) use of the negotiated procedure without prior publication (i.e. direct award) - the negotiated procedure without prior publication can only be used in limited circumstances. The case law of the Court of Justice of the European Union has clarified on a number of occasions that the use of this procedure is exceptional and the circumstances justifying the use of the procedure will be interpreted narrowly. The circumstances which are relevant to COVID-19 are:
- where the supplies, services or works can only be supplied by a particular supplier because competition is absent for technical reasons or to protect exclusive rights, including intellectual property rights, but only where no reasonable alternative or substitute exists and the absence of competition is not the result of an artificial narrowing down of the parameters of the procurement
- insofar as is strictly necessary where, for reasons of extreme urgency not attributable to the contracting authority and brought about by events unforeseeable by the contracting authority, the time limits specified for the open procedures or restricted procedures or competitive procedures with negotiation cannot be complied with.
(ii) accelerated procedures under standard procedures where there is urgency - the open procedure, restricted procedure or competitive procedure with negotiation can be accelerated where a state of urgency renders the minimum timescales impracticable. For example, under an accelerated open procedure, timescales can be reduced to 15 days for receipt of tenders. The public body is still however required to apply a minimum 14 day standstill period so in reality, the fastest an accelerated procedure would still involve a timeframe of at least a month. Unlike the negotiated procedure without prior publication, there is no specific requirement for the urgency to be unforeseeable or not attributable to the contracting authority. Public bodies are required to provide a justification for the use of the accelerated procedure in the contract notice.
(iii) placing a call-off contract under an existing framework agreement or under an existing dynamic purchasing system (DPS) - Ireland's Health Service Executive (HSE) already has a large number of framework agreements in place which should assist in expediting the purchase of critical supplies and services. The HSE has recently established a new DPS for authorised medicinal products marketed in the Republic of Ireland and this may assist in expediting procurements for critical medicines required during the pandemic.
(iv) modifying existing contracts to obtain additional services or supplies – it is possible for public bodies to modify (e.g. extend the scope or volume) existing contracts or framework agreements in a number of circumstances including:
- for additional goods, services or works by the original contractor, irrespective of value, that have become necessary and were not included in the initial procurement where a change of contractor (i) cannot be made for economic or technical reasons and (ii) would cause significant inconvenience or substantial duplication of costs for the contracting authority provided any increase in price does not exceed 50% of the value of the original contract or framework agreement and a modification notice is published in the Official Journal of the European Union (OJEU)
- where the need for modification has been brought about by circumstances which a diligent contracting authority could not have foreseen provided the modification does not alter the overall nature of the contract and any increase in price does not exceed 50% of the value of the original contract or framework agreement and a modification notice is published in the OJEU.
Bespoke procedures for health and other social services
The procurement rules provide a "light touch regime" for specific health and other social services. The light touch regime permits public bodies to develop their own bespoke process or procedures provided that those procedures ensure compliance with the principles of transparency and equal treatment of economic operators. The contract must be advertised in the OJEU and timescales must be reasonable and proportionate.
Procurement guidance on COVID-19
Ireland's Office of Government Procurement (OGP) and the HSE have published information on procurement and COVID-19. The OGP Information Note is available here and aims to support public bodies in managing their procurements during the pandemic. The Information Note advises public bodies to examine their supplier base and supply chain and to take appropriate action to ensure continuity of essential services. The Note outlines the circumstances where the negotiated procedure without prior publication can be used for above threshold procurements. The Information Note also reminds contracting authorities of their obligations to document the reasons for choosing a non-competitive procedure and to retain these for audit purposes. There are various reporting obligations under the Code of Practice for the Governance of State Bodies and Government circulars in relation to non-competitive procurements.
The procurement division of the HSE have put a HBS Procurement COVID-19 Customer Service single point of contact in place in order to manage the supply and replenishment of all personal protective equipment (HBS COVID-19). The HSE has also indicated that it is procuring in accordance with the guidelines outlined in the World Health Organisation Operational Support and Logistics Disease Commodity Packages which sets out specifications for various medical devices and commodities that may be procured during the COVID-19 pandemic.
Remedies for Procurement Breaches
Irish law provides for a 30-day limitation period within which the process for review of a public contract EU procurement rules must be instigated. Such an application involves bringing a statutory form of judicial review proceedings in the High Court under Order 84A of the Rules of the Superior Courts. This is a strict time limit although the courts have discretion to extend it where there is "good reason". While there are currently some restrictions on the Irish courts system due to COVID-19, the 30-day limitation period (which is a statutory limitation period) still applies. However, the High Court may grant leave on the application of an intending applicant to extend the limitation period - a number of such applications have been made in the Irish courts (usually with the consent of both parties) and the Courts have generally been amenable to granting the extension.
For more information on this topic please contact Anna-Marie Curran, Partner or any member of A&L Goodbody's EU, Competition & Procurement team.
Date published: 20 March 2020