COVID-19: Building construction and maintenance procurement guidance for buyers
- 1 April 2020 4:45PM
COVID-19 will impact teams undertaking procurement processes and the supply market.
You need to continue to perform your procurement obligations in line with your agency’s procurement decision matrices, policies and procedures, and the conditions of tender.
Consider the following advice to help maintain good working relationships with industry during this uncertain time.
Communicating with suppliers
It’s critical that we maintain strong communication channels and be mindful of each business’s and individual’s circumstances.
Where appropriate, contact suppliers before they submit tenders to ensure they can respond and raise potential issues, such as timeframe or supply chain concerns, as early as possible.
Suppliers should also be contacted before awarding tenders to ensure they can still meet the contractual obligations. This may help avoid extra work for both parties should the contract need to be cancelled.
It is important to review the specific circumstances of the tender and the expected market, and consider whether more time is needed for the package.
Justifications for longer timeframes might include:
- overloaded telecommunications and internet infrastructure as businesses transition to remote working
- displaced suppliers
- reduced workforce due to larger volumes of COVID-19 cases in the community
- supplier staff shortages.
Cost escalations and supply chain issues
Some areas of the building construction and maintenance industry may be impacted by difficulty getting materials from interstate and abroad. This could result in higher costs or longer timeframes for some tender packages.
- clarify with suppliers aspects of their tender that seem excessively high (to better understand the reasons for increased costs)
- raise potential delivery timeframes issues with suppliers and implement appropriate mitigation strategies
- validate suppliers’ information to ensure that supply chain or cost escalation considerations are applied correctly and only where they impact the project.
Awarding multiple packages to the same supplier
There may be instances where decision-makers are unavailable and tenders are grouped up for approval. This may result in suppliers receiving multiple awards in quick succession.
Consider the impact of this on suppliers and ensure you contact them before award. Have an open discussion about whether they can accept multiple tender awards in the current environment.
Under most contracts, COVID-19 will not trigger a contractual remedy; rather, it will be the consequence of its effects on a particular obligation under the contract. Each claim will need to be assessed under each contract on a case by case basis.
Non-price criteria for COVID-19
Consider including a non-price criterion targeted towards business continuity. This will enable suppliers to tell us how they intend to respond to supply chain or physical resource constraints related to COVID-19.
Regional and remote packages
Regional and remote locations typically find it harder to get resources to deliver projects. Consider the following actions to help reduce the impacts of COVID-19:
- increase the pool of tenderers
- communicate closely with the supply market to identify issues early
- discuss potential mitigation strategies with suppliers if they experience unintended delays.