Not that we have nothing else to do, but Dr Pedro Telles and yours truly keep busying ourselves with the analysis of the extreme urgency exemption from the EU and UK public procurement rules—that is, the statutory interpretation of Art 32(2)(c) Directive 2014/24/EU and its equivalent reg. 32(2)(c) Public Contracts Regulations 2015 (PCR2015).
To be precise, our ongoing debate concentrates on the safeguard that ‘the circumstances invoked to justify extreme urgency must not in any event be attributable to the contracting authority’ [see Art 32(2)(c) in fine Dir 2014/24/EU; reg.32(4) PCR2015, emphasis added]. The specific point that keeps us arguing with each other concerns the attribution or, relatedly, the imputability to the contracting authority of (political) decisions that can be seen to have aggravated the extremely urgent need for the supplies (in the specific case, of medical ventilators).
We are agreed on almost everything else, including the illegality of a number of contracts directly awarded (presumably) by Cabinet Office due to the fact that the companies or consortia that received them were (and continue to be) unable to immediately deliver ventilators (notably, due to the need for regulatory approval)—see eg Guardian, 14 Apr 2020.
Our disagreement thus concerns the direct award of extremely urgent contracts to suppliers that could immediately deliver ventilators. While I argue that (if any) these were legal awards because the Cabinet Office was covered by the relevant exemption, Pedro challenges this position and would consider the award of all ventilator contracts illegal due to the extemporaneity of the intervention.
To be fair, the question is rather academic, but I still think it is worth pursuing, as it affects the general interpretation of the rules for extreme urgency as it concerns the impact of the prior behaviour of the contracting authority, as well as the viability or less of my proposed distinction between political and operative decisions, which Pedro rejects. So here are some additional thoughts, trying to drill down on this issue.
Who has which burden of proof?
Our positions are diametrically distant. Even from the first premises, it would seem, as Pedro says in his latest post that “Regulation 32(2)c is exceptional in nature … and as such the grounds for use need to be interpreted narrowly. This means that in case of uncertainty/unpredictability as seen in this particular situation, the benefit of the doubt does not support the use of this provision but actually forbids it.” I do not really understand what this is meant to stress. One of the requirements is for there to be ‘events unforeseeable by the contracting authority’ and it is precisely the uncertainty surrounding such unforeseeability that opens up the possibility of resorting to direct awards if the rest of the conditions are met. On that, we seem to continue to disagree too.
As Pedro puts it, in his view, “Regulation 32(2)c creates a positive obligation for the contracting authority to prove that the grounds for extreme urgency are met. I think this is crux of the difference between mine and Albert's view. When Albert states we do not know if the counterfactual of a hypothetical procedure launched in February would have been successful that is *precisely* my point. Had it been done and failed, then the Government would be more than entitled to use a negotiated procedure without prior notice. But crucial element here is that it didn’t.”
I reject the way the disagreement is framed there. I do not challenge that it is for the contracting authority to demonstrate that the grounds for extreme emergency existed: ie unforeseeability of the events by the contracting authority in question; extreme urgency making compliance with general deadlines impossible; and causal link between the unforeseen events and the extreme urgency (as per the European Commission’s guidance of 1 April 2020, see here).
I also reject that recourse to extreme urgency procurement can be made dependent on the previous failure of an alternative procurement approach, as Pedro suggests. Not least, because those are two different grounds for having recourse to direct awards (or rectius, the negotiated procedure without prior publication), both under EU law [cfr Art 32(2)(a) and (c) Dir 2014/24/EU] and UK law [cfr reg.32(2)(a) and (c) PCR2015].
What I argue is that it is for those wanting to challenge the use of the extreme urgency exemption to positively demonstrate that the situation is attributable to the contracting authority, as the contracting authority cannot be put in the position of proving a negative. Here kicks in my argument that “I do not think a negative approach (not unattributable) is satisfactory at all. I think a more stringent approach needs to be taken, to at least require evidence of a positive contribution to worsening the situation by the contracting authority.”
This is the perspective from which I would assess Pedro’s additional arguments and factual statements about the way the Cabinet Office acted in the lead up to the launch of its extreme urgency procurement of ventilators on 16 March 2020.
January to March 2016: uncertain times
Pedro frames the question as “Was the Government (sorry, Cabinet Office) a reasonably diligent contracting authority in the run up to mid-March when it comes down to availability of ventilators?”. He provides links to a number of reports and concludes that they constitute “sufficient evidence that the [UK] Government knew of the need to secure further ventilators on the run up to March 16th and did not act upon it, effectively losing any semblance of protection that could be afforded as 'a diligent contracting authority'.” The difficulties I have with this approach are as follows.
First, there is no evidence that Cabinet Office was inactive all the time up and until 16 March. At least one of the reports Pedro links indicates that ‘the government started talking to manufacturers of ventilators about procuring extra supplies in February. But it was not until March 16, after it was clear supplies could run out, that Johnson launched an appeal to industry to help ramp up production’ (emphasis added). We have very limited information on the evolving analysis of the likely sufficiency of the contractual arrangements already in place, notably by NHS Supply Chain, which has a rather large framework agreement for medical ventilators in place (see for more details the 2018 contract award notice).
This could put the approach in context, as it would be reasonable for the Government to first have been in touch with the contractors within the NHSSC framework agreement to check their maximum delivery capability, and only once this was assessed as insufficient, to go out to market to try and secure the remainder of the expected needs, now extremely urgent. Without more information, it is difficult to assess what happened, but that could be understood (either within or outwith the framework agreement) as direct contacts and (potentially) negotiations of the sort that are allowed under extreme urgency, despite the fact that the contracts ended up being awarded on 16 March. This would still not justify resorting to direct awards to companies or consortia unable to deliver immediately, as discussed above, but it would go a long way to deactivate any claims of procurement passivity between end of January and early March 2020.
Moreover, second, it may be worth stressing that the existence of some benchmarks could be useful in assessing the timeliness of the intervention. Remarkably, the EU itself took a similar time to react and the EU-level effort to procurement ventilators under the Joint Procurement Agreement (JPA) was launched on 17 March, thus contemporaneously to the UK’s awards—see eg Reuters, 3 Apr 2020. The JPA will still take time to result in the effective supply of ventilators so, as of today, it seems difficult to assess whether one approach will be significantly more successful to the other in the long run.
Third, and perhaps more importantly, the modelling of the likely evolution of the pandemic in the UK was all over the place in the period in question (and only more and better data is allowing for more reliable forecasts as it evolves) and there is ongoing controversy (and opacity) on the Government’s chosen strategy and its expected/foreseeable clinical implications. Pedro somewhat agrees, but indicates that this is ultimately no excuse because “*a* demand for extra ventilators was not unpredictable in late January/early February, even for a reasonably diligent contracting authority”. He further concludes that “the Government was aware of the need prior to March 16th and did not act upon it. In my opinion this leads to the consequence of contributing towards the extreme urgency.”
I would argue that this remains largely a weak claim, not least because it comes back to saying that the circumstances under which the extremely urgent direct awards were made were not (completely) unattributable to the contracting authority—or, in other words, that somehow the contracting authority could have done more or done something earlier. But this begs the question how to assess diligence in that context.
When would a diligent contracting authority with a framework agreement (directly or indirectly) in place have acted to secure additional supplies outside of that mechanism? Why roll back the decision to end of Jan 2020 and not earlier, or later? Also, what would have been the big difference between launching a procurement in early February or mid March? This is all largely speculative and would not make for a solid legal test that could withstand the specifics of a given case, much less become of general application.
tentative conclusion
For the time being and in light of the available information, I do not think there is a sufficient basis to say that the UK Government was barred from relying on the extreme emergency procurement exemption, either due to its tardy reaction to the pandemic from a public health perspective, its eminently political (and in my view wrong and short-sighted) decision not to participate in the JPA for ventilators, or the timing of its decision to directly award contracts for ventilators. None of that can be construed as making the ‘circumstances invoked to justify extreme urgency … attributable to the contracting authority’.
That does not mean that (most of) the ventilator contracts were not illegally awarded for other reasons (ie impossibility to immediately fulfil the contract), or that the procurement emergency has been adequately handled. It simply comes to stress the point that, in order to keep statutory interpretation consistent and resilient to the pressures of a given case, it is necessary to disentangle the different requirements justifying direct awards under the extreme urgency exemption.
However, none of this minimises the need for a proper investigation into the whole approach to the procurement of ventilators, which seems bound to emerge as a new #ferrygate. I, for one, look forward to the post-crisis public inquiry that is being demanded—see eg FT, 16 Apr 2020 (paywall).