Public Procurement – post Brexit
The Brexit transition period will end on 31 December 2020 and (as the law stands) cannot be extended beyond that date. Any potential trade agreement with the EU between now and then is increasingly unlikely to address public procurement. As a result, preparations are being made to leave on a "no-deal" basis.
New UK Regulations
Updated 24 November 2020: A new statutory instrument was made on 19 November. The Public Procurement (Amendment etc.) (EU Exit) Regulations 2020 (SI 2020/1319) (PPAR 2020) will come into force at 11pm on 31 December 2020. The PPAR revoke and replace the Public Procurement (Amendment etc.) (EU Exit) Regulations 2019 and the Public Procurement (Amendment etc.) (EU Exit) (No.2) Regulations 2019 – in England, Wales and Northern Ireland. We anticipate that the Public Procurement etc. (EU Exit) (Scotland) (Amendment) Regulations 2020 will come into force in Scotland imminently.
These regulations were prepared in anticipation of a "no deal" Brexit. However, the substance of UK procurement rules will remain largely unchanged, at least in the short term.
The new legislation modifies the previous Public Contracts Regulations 2015, the Concession Contracts Regulations 2016 and the Utilities Contracts Regulations 2016 (collectively “the principal public procurement Regulations”) to reflect the UK's status as a non-Member state.
The modifications include the transfer of the European Commission's supervisory functions to the Cabinet Office and a new approach to advertising tender notices (please see the "Advertising notices" section below for further information). In addition to the principal public procurement Regulations, among others, The Defence and Security Public Contracts Regulations 2019 have also been introduced to make technical amendments to the corresponding, 2011 regulations.
The UK government has sought to transition a number of the existing bilateral agreements the UK is a party to by virtue of its EU membership. The newly-transitioned agreements seek to replicate as closely as possible the form of the EU's agreements with non-UK suppliers. For 18 months from exit day, UK contracting authorities and entities must afford the same rights and remedies to economic operators from third country signatories to agreements with the EU as they do to economic operators from the UK and Government Procurement Agreement states.
Government Procurement Agreement ("GPA")
The GPA is formal agreement designed to ensure that the public procurement market is open, fair and transparent in terms of competition and advertising. The GPA allows access to public procurement markets in certain, other World Trade Organisation (WTO) member states.
The UK intends to continue to be a party to the GPA as an independent nation (it was previously a party by virtue of its EU membership), with the GPA Committee confirming in October that the UK can accede to the GPA independently from 1 January 2021.
The scope of the GPA is narrower than the procurement activity covered under the EU procurement directives. In particular:
- A limited range of public bodies is caught by the GPA.
- The GPA does not cover below-threshold contracts. Although the EU procurement directives do not contain provisions dealing with below-threshold contracts, the so-called 'Treaty principles' have required certain levels of transparency and non-discrimination to be observed within the EU.
- Procurement in relation to the utilities sector, the defence sector, some services and certain private contracts subsidised by the government are not caught in the same way as the current, pan-EU approach.
- The GPA transparency rules are less prescriptive and detailed in relation to competition and advertising than the EU procurement directives, especially with regard to remedies, criteria and evidence for qualification (selection), framework agreements and electronic auctions.
Therefore, the UK will be able to compete for some public contracts throughout the EU (and vice versa for EU businesses in respect of UK opportunities), albeit on a more limited basis. UK businesses will have the same status as bidders from third party countries which don't have an agreement with the EU.
As before, UK businesses will be able bid for public contracts in other GPA member countries outside of the EU, such as the US, Canada, Hong Kong and Japan. Conversely, businesses from other countries that are a party to the GPA retain their right to compete for UK public sector contracts.
Currently, UK businesses are obliged to publish contract notices in the Official Journal of the European Union ("OJEU"). OJEU notices will now be replaced with a new UK e-notification system known as 'Find a Tender'.
Contracting authorities and utilities using a third party 'eSender' to publish notices must ensure that their chosen eSender has the ability to publish notices to Find a Tender. On 10 November 2020, the UK government published a list of eSenders with the capability to publish notices to 'Find a Tender'.
The requirements to upload procurement notices to existing portals such as Contracts Finder, MOD Defence Contracts Online, Public Contracts Scotland, Sell2Wales and eTendersNI will remain unchanged.
Find a Tender is separate to any obligation on UK contracting authorities to publish information on Contracts Finder etc., which will continue to apply.
Ongoing procurement agreements
Our understanding is that procurements that are launched before 31 December 2020 and have been advertised in the OJEU will continue to be governed by EU law, even after the end of the transition period. The same point applies to pre-2021 framework agreements, so that ongoing or subsequent call-offs from those frameworks will also be governed by EU law. We have contacted the Crown Commercial Service (who provide guidance in this area on behalf of the Cabinet Office), to confirm that they share our understanding and to check points of detail. We will update this article if we have a substantive response.
Updated 24 November 2020: The new PPAR 2020 addresses ongoing procurement agreements and provides that ongoing procurements are able to continue without being subjected to any substantive changes in procurement rules.
On 23 November 2020 the Cabinet Office released Procurement Policy Note 08/20 on the Introduction of Find a Tender. This confirms that for procurements that are in progress before 11pm on 31 December 2020 and have not been finalised, the current requirement to publish notices to OJEU will continue even after the end of the transition period. This includes all relevant notices, e.g., contract notices, contract award notices, contract amendments notices and corrigendum.
The guidance asks that contracting authorities also send notices which are required to be published to OJEU to Find a Tender so that Find a Tender can become a one-stop-shop for suppliers looking for UK opportunities. This is not a legal requirement, however, contracting authorities that are legally required to send notices to OJEU for publication must do so before they are published on Find a Tender.
We will continue to update this article with any substantive developments.