In what will come as some relief to many, guidance has been issued by Finance Minister Conor Murphy to public bodies encouraging a range of support measures to be applied to their supply chains during the current period of upset, including:

 

• ensuring that supplier invoices are paid without delay and without concern for immaterial errors;
• allowing for invoices to be raised more frequently and, if appropriate, in advance;
• encouraging similar payment measures to be passed on to sub-contractors;
• re-deploying capacity from a redundant requirement to where it might now be used; and
• relaxing performance requirements like KPIs and liquidated damages.

 

As a starting point, Contracting Authorities should be identifying those suppliers who are particularly exposed to cash-flow issues and engaging with them now to avoid reliance on contractual relief measures such as force majeure (as we discussed previously in our article) or being unable to continue to trade.

 

Suppliers should be prepared to engage with Contracting Authorities (on an open-book basis) to demonstrate what amounts should be covered (bearing in mind that potential profits cannot be included) and how relief payments have been spent. They must also be aware that contracts without volume commitments and contracts under which performance has already been in jeopardy before this crisis hit will not be eligible to benefit from the relaxed approach.

 

The public should also be comforted that the normal controls against abuse will apply so that a supplier’s failure to act transparently or with integrity will allow relief payment money to be recovered by the Contracting Authority. Given the breadth of unprecedented measures taken by government, a priority will be to ensure that advantage will not be taken of measures designed to help businesses through what will, unfortunately, be a very difficult position for many in Northern Ireland’s public supply system.

 

If you would like to discuss contract reviews or variations, please contact your usual Tughans contact or Paul Eastwood, Associate Director in Tughans’ Procurement team, at paul.eastwood@tughans.com.

While great care has been taken in the preparation of the content of this article, it does not purport to be a comprehensive statement of the relevant law and full professional advice should be taken before any action is taken in reliance on any item covered.