Impact of Brexit on Procurement Law

London
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As we wait for the outcome of the UK’s last minute negotiations with the EU on Brexit, whether this results in a trade deal or no deal, it is important both for government and public sector bodies and businesses to prepare for any forthcoming changes to the procurement law regime. This publication summarises Brexit impact on procurement law, in particular The Public Contracts Regulations 2015 (PCRs), following the end of the transition period on 31 December 2020.

Amending Legislation

The current procurement regime has applied during the transition period in accordance with the UK-EU Withdrawal Agreement. Following the transition period, the current procurement regime will still continue to remain largely unchanged. The Public Procurement (Amendment etc.) (EU Exit) Regulations 2020 (Amending UK Legislation) will come into force on 1 January 2021 but it keeps the changes to the current procurement legislation to a minimum and its primary purpose is to address technical deficiencies in retaining EU law.

The two main changes are:

  1. Find a Tender - the introduction of a UK only e-notification portal to publish, access and respond to procurement notices called Find a Tender. Find a Tender replaces OJEU and TED for UK procurement and will be available for public use from 23:00 on 31 December 2020. This means that contracting authorities will be required to publish notices on Find a Tender instead of in the OJEU. Key points from Procurement Policy Note 08/20 which provides further information on Find a Tender are:
    • in respect of procurements which are launched and have not been finalised by 23:00 on 31 December 2020, contracting authorities will need to continue to publish notices in OJEU/TED. A procurement has been launched when a contract has been advertised (e.g. publication of a PIN or OJEU notice) and it is finalised on publication of a contract award notice, or where a contract award notice is not required, when the contract is entered into. In this case, the PPN recommends that contracting authorities also publish on Find a Tender so suppliers only have to look in one place, but this is not a legal requirement;
    • for “new” procurements that are launched after 23:00 on 31 December 2020, contracting authorities are required to publish notices on Find a Tender instead of OJEU/TED; and
    • the current requirements to publish on Contracts Finder remain unchanged.
  2. Powers of the Cabinet Office - the Amending UK Legislation transfers the EU Commission’s supervisory functions to the Cabinet Office. This means the Cabinet Office will be responsible for reviewing the financial thresholds for procurements as well as updating the procedures for the electronic communication of tenders (for example, considering the tools and devices which may be used for the electronic receipt of tenders or any exceptions to the obligation to require use of electronic means of communication).

Similarly, in Scotland, a largely equivalent set of amending regulations are being proposed (The Public Procurement etc. (EU Exit) (Scotland) (Amendment) Regulations 2020) albeit these regulations are still in draft form and are not yet a statutory instrument. Other procurement legislation has also been refined such as The Defence and Security Public Contracts (Amendment) (EU Exit) Regulations 2020 which will come into force on exit day 1. These regulations make amendments to The Defence and Security Public Contracts Regulations 2011.

Government Procurement Agreement

The UK will accede to the World Trade Organisation (WTO) Agreement on Government Procurement (GPA), as an independent member, on 1 January 2021.

The GPA is an agreement between members of the WTO under which a GPA party agrees that certain procurement opportunities are covered which gives suppliers situated in another GPA country the opportunity to bid for those goods or services.

The EU is a party to the GPA but individual EU member states are not a party to the GPA in their own right. Therefore with Brexit, it was necessary for the UK to obtain approval to join the GPA in order to allow UK suppliers the ability to bid for contracts in other GPA member states.

The main point is that the PCRs implement the commitments the EU has made under the GPA. For example, under Regulation 90 of the PCRs, if the GPA applies to a public contract being awarded in the UK, a supplier in a GPA country has the same rights as a UK based supplier and can bring a claim (and seek remedies) under the PCRs. It is clear that the UK intends to comply with its GPA obligations but also move away substantially from the current EU approach, see further below. DLA Piper has further examined the UK’s relationship with the WTO and the GPA here.

Future reform

In the longer term, the UK Government has made clear public statements that it intends to make changes to the procurement rules. The Cabinet Office has been engaging stakeholders on the potential for reform and a Green Paper with such proposals was published on 15 December 2020, with the Cabinet Office stating that the “plans will cut red tape, reduce bureaucracy and help unleash wider social benefits from public money spent on procurement” and that the “measures will transform the current procurement regime to put value for money at the heart of the new approach”.

For further consideration of the potential options for reform, please see DLA Piper’s recently published procurement law reform paper: and for our first reflections of the Green Paper itself.

The recent Procurement Policy Note 11/20: is very much a portent of things to come. It allows competitions for lower value contracts under the procurement thresholds to be limited to SMEs/VCSEs or to a certain geographical area with the intention that this will drive growth and innovation in local communities.