03 Apr 2020

NSW emergency procurement procedure provides expedited procurements to aid COVID-19 response

By Lina Fischer, Jessica Lighton, Stuart Cosgriff, and Dr Ashley Tsacalos

Public sector agencies and their procurement teams should review the new emergency guidelines to understand the provisions and exemptions to expedited procurement.

The NSW Government has issued guidance on undertaking emergency procurements in response to the COVID-19 pandemic. These guidelines provide for the head of an agency, in an emergency situation, to authorise procurements to a value sufficient to meet the immediate needs of that emergency and undertake an expedited procurement.

How the emergency COVID-19 procurement works

NSW Government agencies must conduct their procurement activities in accordance with the Public Works and Procurement Act 1912 (NSW) (PWP Act), Public Works and Procurement Regulation 2019 (NSW) (PWP Regulation) and relevant policies, including the NSW Government Procurement Policy Framework (for more on this, see our earlier article here).

Clause 4 of the PWP Regulation permits the head of an agency (or their nominee), in an emergency situation, to authorise procurement of goods and services to a value sufficient to meet the immediate needs of that emergency. These procurements will be exempt from section 176 of the PWP Act, meaning the agency will not need to comply with any policies or directions of the Procurement Board, including the Enforceable Procurement Provisions (PBD 2019-05). This enables agencies to undertake expedited procurement during the COVID-19 pandemic.

The NSW Government has determined the COVID-19 pandemic qualifies, at this time, as an emergency under clause 4 of the PWP Regulation. This may change in the future as the COVID-19 situation stabilises and no longer necessitate "emergency" status. Further general guidance on this may be given in the future by the Procurement Board. If so, we will keep you updated of any change.

Does your procurement meet the needs of the emergency?

NSW Government agencies will need to conduct a case-by-case analysis of any proposed emergency procurements to assess whether it is necessary and of a value sufficient to meet the immediate needs of the emergency. This assessment should have regard to, but is not limited to, the following:

  • type, quantity and value of the goods and/or services for procurement and their general market availability;
  • the agency's functions and operations; and
  • any other relevant factors pertaining to the immediate needs of the emergency.

Agencies are only able to procure what is necessary to meet the immediate needs of the COVID-19 emergency. If their assessment determines that the proposed procurement exceeds this threshold then the agency will not be able to rely on the emergency procurement provisions to the extent that it does so. However, the guidelines are silent as to what threshold agencies should apply in their assessment of "necessary" and "immediate needs".

Agencies will not be limited by the terms of their accreditation or the approved maximum contract value applicable to the accreditation. Agencies are also permitted to use any procurement method that meets their needs in the time available.

How can your agency authorise and report an emergency procurement?

Agency heads or their nominees are able to authorise emergency procurements. The guidelines provide an authorisation form agencies can use.

When agency heads are nominating an employee for the purpose of authorising an emergency procurement, standard agency delegations under the Government Sector Finance Act 2018 or Government Sector Employment Act 2013 are not sufficient. Instead, the guidelines recommend that agency heads nominate a relevant officer, such as the Chief Procurement Officer, who will be working with the State Emergency Operations Controller on COVID-19 related procurement.

Agencies are still required to confirm available funds for any proposed emergency procurement and must comply with financial delegations when authorising emergency procurements.

It is recommended that agencies record all decisions and approvals including justification for the emergency procurement as well as standard procurement records. All emergency procurement authorisations must be promptly reported to the Procurement Board. Given the rapidly evolving nature of the COVID-19 pandemic, the guidelines permit agencies to maintain a list of all emergency procurements and provide consolidated reports to the Procurement Board at regular intervals. Contracts greater than $150,000 (including GST) must be disclosed on eTendering.

Exemptions apply to emergency procurements

Under the guidelines, where an emergency procurement is authorised under clause 4 of the PWP Regulation, an agency is exempt from complying with the following requirements under section 176 of the PWP Act:

  • any policies or directions of the Procurement Board, including the Enforceable Procurement Provisions (PBD 2019-05);
  • the requirement to use whole of government contracts or mandated pre-qualification schemes;
  • the terms of the agency's accreditation;
  • the requirement to achieve value for money;
  • the principles of probity and fairness; and
  • the complaints regime aligned with the Enforceable Procurement Provisions (PBD 2019-05).

These exemptions only apply in relation to the specific emergency procurement. All proposed procurements that do not qualify as emergency procurement cannot rely on these exemptions.

While an agency will be exempted from the statutory requirement to achieve value for money for an emergency procurement, it must still use government resources efficiently, effectively, economically and in accordance with the law. The guidelines recommend agencies aim to comply with the Procurement Policy Framework to the extent possible in the circumstances. It is also strongly recommended that the agency maintains records of any such emergency procurements.

Agencies must continue to manage any real or perceived conflicts of interest and ensure suppliers do the same. Compliance with the agency Code of Conduct, public sector values and the law is still required.

For further information on procuring in emergency situations, please contact a member of our team. The COVID-19 Emergency Procurement procedure is available on ProcurePoint, here.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.