COVID-19 updates for Commonwealth contracts
The current coronavirus pandemic is causing organisations to carefully consider how they will deal with the risks associated with this pandemic. Responses include protocols for working from home and protocols for hygiene controls, but have you considered how this pandemic might affect your current procurement processes or contracts?
Here is a short summary checklist of issues for you to consider – their relevance will depend on the stage and nature of your procurement or contract.
ICT usage rights
Do you need additional licensing or usage rights to allow increased working from home arrangements?
Outsourced services or support arrangements
Other delay or non-performance protections
What other rights or processes do you need to put in place to mitigate the risk of delays or non-performance?
Supply chain risk mitigations
Do you need to build in increased information access rights or reporting obligations? Do you need the right to direct a change of supply chain entities or ensure that you have greater oversight of the service provider’s right to substitute materials?
Termination or reduction in scope flexibility
Would increased agreed termination or changes in scope provisions be of value?
Would pre-agreed performance suspension rights, or an ability to direct the service provider to provide services remotely (or temporarily vacate any furnished facilities) be a suitable risk mitigator?
Contract transfer rights
Do you need a right to transfer responsibility for the contract to another entity eg to facilitate consolidation of management resources?
For all identified issues, what cost impacts should you consider? How can you build in some cost certainty to avoid difficult negotiations if you wish to exercise any of these rights?
Exemptions from CPR requirements
Have you considered the extent to which the CPRs allow you to undertake expedited procurements of goods or services to enable your organisation to respond rapidly to its coronavirus requirements?
Business continuity generally
What else should you consider for your business continuity arrangements? What additional business continuity protections do you need to build in? For example, should you ask tenderers to explain what continuity they can provide in the event of a major staffing shortage? Can you identify your minimum personnel resource requirements and build your procurement around that?
Statement of Requirements
What additional requirements could you usefully add to deal with coronavirus risks? Examples include pre-agreed resourcing levels and mechanisms for dealing with significant staff shortages, rights to direct changes to the way services are performed (eg remotely rather than on-site, without travel), and pre-agreed options to ramp up health and hygiene requirements.
Have you thought about whether you have the ability to provide, and to receive and distribute, personal information (including health information) about personnel who may have been infected or are at risk of infection with COVID-19? Should the service provider be required to prepare a Personal Information Handling Plan that addresses how personal information will be handled before, during and after any coronavirus emergency or other impact?
This list is focused on general services and ICT contracts. If you are dealing with property or capital works projects, employment or other specific contract requirements, think also of how coronavirus risks might affect them. The Maddocks team is working its way through many of these issues now.
An audit of New South Wales local government procurement
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