The PPN 007 FAQ is the useful half: nine answers that change how you apply the policy
Companion FAQ documents usually get skimmed. This one should not be. The PPN 007 FAQ contains the answers that decide how much work your organisation takes on: that termination is never mandated, that local government reviews are optional, that full supply chain mapping is not required, and that a badly timed termination can hand your supplier a better deal than the one you just ended. If you only read one part of the Russia and Belarus package before committing resource, read this one.
It tells you what you do not have to do
The FAQ scopes the workload down at least three times. There is no central mandate to terminate. There is no requirement, at this stage, to consider terminating subcontracts with Russian or Belarusian subcontractors. And full supply chain mapping to source should not be necessary to execute the actions in the PPN.
For local government it goes further again. Best value authorities and parish councils are not required to review their contract portfolios at all. They should consider whether a review is proportionate given resource implications. That is a materially different instruction from the one many councils assumed they had received in 2022.
None of this is a licence to do nothing. The FAQ still expects enough information to identify and assess risk effectively, and still expects decisions to be documented. But scoping is a legitimate act of compliance here, not a corner being cut.
It tells you where the commercial trap is
Question 13 is the one commercial teams should circulate internally. It describes a customer holding a fixed three-year contract priced below the current market. Terminate it and the supplier is freed to sell at the higher market rate, while the authority procures a replacement at that same higher rate. The policy objective is served and the supplier ends up better off.
That is why the FAQ tells you to take the termination option producing the lowest overall payment on a whole life cost basis, and why it asks you to assess penalties, notice periods and switching costs before deciding. It also warns that any extra costs land on existing budgets, which turns a policy decision into a budget decision fairly quickly.
The related answer on critical contracts is equally blunt. Do not terminate a critical contract before a suitable alternative is available that can be implemented without disproportionate cost, and do not terminate where there is no alternative source of supply unless you are assured the risk is manageable.
It tells you where the legal line sits on new bids
The exclusion power in new procurements is narrower than it first appears. You can decline a bid from a supplier constituted or organised under the law of Russia or Belarus, or whose Persons of Significant Control are resident there, only where neither the supplier nor any supply chain member relied on for delivery is a UK supplier or a treaty state supplier. Where that test fails, automatic exclusion is not available.
The FAQ also clarifies the legal basis, which is worth understanding before someone drafts a rejection letter. This is not an exclusion grounds decision under the Procurement Act 2023. It rests on there being no obligation under the Act to consider non-treaty state suppliers, and neither Russia nor Belarus is a GPA member or party to a UK procurement agreement. Your normal sections 26 and 27 checks continue regardless.
Group structures are where organisations get caught. A UK registered entity with a Russian parent counts as a Russian or Belarusian supplier for termination purposes, but for new procurements a group containing UK or treaty state suppliers demands specific consideration and legal advice. Treating the two situations identically is the most common error in this policy area.
What to do with it
Turn the FAQ into a one-page internal decision note. Who decides, what triggers a review, what the treaty state check looks like, who signs off, and what gets recorded. Most of the content already exists in the document. The work is translating it into your own governance language before a live case forces the issue.
Give the supplier communication line to whoever manages the relationship. The FAQ says the prime contractor should be advised that the contract is being terminated in response to the situation in Ukraine and the resulting sanctions. Consistency there matters more than eloquence.
Then decide deliberately how far you go on the extended local government reach. The 2022 Order lets English best value authorities and parish councils look at subcontractors, suppliers, associated bodies and even customers of a contractor. That is a wide net, and the FAQ leaves it to each body to judge whether casting it is proportionate.
The takeaways
- Termination is discretionary throughout, and local government portfolio reviews are optional.
- Compare termination options on whole life cost, because ending a cheap fixed-price contract can benefit the supplier.
- New procurement exclusions fail wherever a UK or treaty state supplier sits in the chain.
- This is not an exclusion grounds decision, but sections 26 and 27 checks continue as normal.
- Read the FAQ before scoping the work, not after committing the resource.
Want the full breakdown?
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