An interesting and welcome Procurement Policy Note (PPN) was published on 28 March 2022 in line with sanctions levied by HMG following Russia’s invasion of Ukraine. PPN 01/22 provides guidance as to how contracting authorities can “further cut ties with companies backed by the states of Russia and Belarus”.
Which organisations does PPN 01/22 affect?
Namely, this guidance applies to:
- Central Government Departments;
- Their Executive Agencies; and
- Non-Departmental Public Bodies.
The above contracting authorities must implement the guidance with immediate effect; the wider public sector is also encouraged to “conduct appropriate and proportionate due diligence” and consider the PPN’s application.
PPN 01/22 Requirements
The PPN requires in-scope organisations to:
- Review their contract portfolio;
- Identify any contracts where Russian or Belarusian suppliers are a prime contractor or are part of the supply chain;
- Consider terminating applicable agreements in accordance with the terms of the contract (if a Russian/Belarusian is a prime contractor);
- Terminate applicable contracts if an alternative supplier can feasibly be sourced with minimal disruption to services. (Care must also be taken to ensure that new appointments do not impact upon value for money for the authority and the taxpayer).
Reviewing and terminating existing contracts
When reviewing contracts, in-scope authorities will need to ensure that they are equally compliant with both PPN 01/22 and the Public Contracts Regulations 2015. Comprehensive risk assessments should be undertaken before effecting contract termination.
Conducting new procurements
At present, there is no requirement to exclude Russian and Belarusian suppliers from forthcoming or live procurements. However, in-scope bodies can “decline to consider” bids from Russian/Belarusian suppliers as long as they are not registered in the UK and/or do not have significant operations in the UK.