Potential revamp of government procurement process on the horizon

Long-assumed practices in government procurement may well be becoming a thing of the past as the pandemic has forced governments to change the way they approach procurement.

Reporting on the trend, Daily Commercial News has quoted a Q3 Torys Quarterly article—"Rewiring the supply chain: how the pandemic is shaping government procurement”—which discusses the pandemic’s effect on government procurement.

Torys counsel and co-author of the article Thomas Yeo told the publication that lawyers are getting ready to react to changes in how governments deal with procurement in the future.

“As things settle, I think governments are all thinking, OK, how are we positioned in the future if we face another crisis like COVID or a different type of crisis,” he said.

“Do we have the domestic capability to meet the needs of an emergency like that, and how dependent are we as a nation on foreign supply chains.

“I think you’re going to see some of these exemptions that have been in these trade agreements and maybe haven’t been used all that much being looked at in a new light.

“It is going to be worth watching…in the coming years to see how governments try to rely on these exemptions and to see whether there will be challenges.”

Thomas noted that he doesn’t think the changes in procurement practices both domestically and globally will be so extensive that contractors have to worry about losing access to foreign projects potentially deemed to be of national interest.

“I think governments will be reluctant to bypass the traditional rules completely and I think you’ll see this more in the situation of ensuring development of domestic capacity for things, as opposed to just trying to bypass the rule to get things done as quickly,” he said.

Firms in the construction sector should completely evaluate their procurement practices in the private sector given the newfound awareness of the fragility of international supply chains. It is worth noting, that the automotive sector was hard hit by a lack of computer chips and realized how vulnerable its supply chain is.

He explained that every business is likely looking at where they are vulnerable for the next crisis, whether it’s a pandemic, a natural disaster or climate change.

“The ability of the supply chains to be there and to meet their demands, that’s all thrown into question now. So, I think companies are going to be taking a good hard look at where those vulnerabilities are,” he said.

“And also trying to try to deal with things contractually and thinking very closely about force majeure clauses and those sorts of things to make sure they’re prepared for the future.”

You can read more about our Procurement work on the practice page.

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