The UK government has just published its third PPN of 2020, again in response to COVID-19, and this time focusing on the use of payment cards to pay suppliers even more quickly. This is part of wider state intervention into UK plc as the economic consequences of the pandemic continue to bite.
The PPN is narrower in scope than PPN01 or 02, focusing on central government departments and agencies. Other contracting authorities (such as local authorities or universities) are invited to follow the guidance if they wish.
Procurement card use will be increased, and the monthly authorisation limits increased to £100,000 per month for key card holders. The cards are considered to be the most efficient way to get money to suppliers and, the guidance says, could circumvent Purchase Order and other approval systems. Spend over £500 per month on cards needs to be published by in-scope organisations.
Whilst this guidance will be welcomed, contracting authorities will want to ensure that appropriate records of spend are maintained and are in line with approved budgets. Other obligations of many contracting authorities, whether in the law, their own policies or to funders/regulators, will often limit the discretion of individual purchasers to make payments to suppliers. The importance of monitoring for procurement fraud, cyber attacks and ensuring ongoing value for money have not changed as a result of this latest guidance.
If your organisation requires any support in relation to procurement or state aid legal advice, please contact David Hansom, Partner on firstname.lastname@example.org / +44 0207 876 4127 or your usual contact at Clyde & Co.
Procurement cards allow authorities to pay suppliers instantly for goods and services.