What next for UK public procurement after Brexit?

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Whilst the Government has said it will ensure that the UK will remain part of the World Trade Organisation’s Government Procurement Agreement (GPA) following departure from the EU in March 2019, details on the public procurement regime that will replace the EU Directives remains opaque at best.

In the latest published position papers published by the Department for International Trade (DIT) covering the future of trade and customs arrangements the Government states its policy objective of ensuring that firms retain “non discriminatory access to a public procurement market estimated to be worth over £1.3tn annually”.

“We will take specific steps to ensure the UK remains part of the GPA when we leave the EU,” said the report, adding “Where we have chosen to open the UK’s public procurement market to international competition, the UK also benefits from increased choice and value for money.”

Additionally, the DIT proposes the establishment of “a UK trade remedies framework that addresses unfair and injurious trade practices, or unexpected surges in imports”, consistent with the UK’s World Trade Organization (WTO) obligations.

So, what does that mean for public procurement post-29th March 2019 once the United Kingdom leaves the European Union, and assuming no transitional or interim ‘deal’ is negotiated in the meantime, the so-called “no deal scenario”?

In the short term, very little it has to be said.  For whilst UK and Scottish procurement legislation can clearly claim its provenance from the 2014 EU Public Procurement Directives, implemented into domestic legislation through secondary legislation, the avowed purpose of the EU WIthdrawal Bill will ‘copy’ EU legislation wholesale into UK law.  The UK Parliament can then “amend, repeal and improve” the laws as necessary, subject to legislative consent from the UK Devolved Administrations where necessary.

However, as a recent briefing paper by Victoria Longcroft for Bird & Bird LLP illustrate, a number of immediate practical issues will arise post-Brexit Day which have yet to be clarified. For example:

  • the status of the recitals to the procurement directives may not be clear. The recitals to the 2014 Directives are currently used for interpretation of the Directive and in practice they actually contain important additional obligations. By way of example, they specify that the award criteria for the competitive procedure with negotiation must remain stable throughout the process, a requirement which is not as clear from the wording of the Directive itself.
  • the status of European case law will change. Currently EU case law on key issues, such as the amount of detail that you must give an unsuccessful bidder, or as to what constitutes an abnormally low tender, or grave professional misconduct, is binding – in future it will carry the same weight as a Supreme Court decision.
  • it may no longer be possible for UK authorities to publish notices in the Official Journal (OJEU), meaning that the procedures for contract notices, contract award notices, VEAT notices etc. become difficult practically to comply with.
  • the Treaty principles are enshrined in the UK legislation but are currently interpreted in light of EU law. What do the principles mean in a post-Brexit world?
  • it is unclear whether non-UK bidders would still be able to claim protection under the Regulations.

Source: Brexit: the end of public procurement rules or business as usual?

More generally, for those hoping for a pubic procurement laissez-faire post-Brexit, they are likely to be disappointed.  Indeed the EU Public Procurement Directives themselves are closely entwined with the GPA, particularly in terms of ensuring a fair, transparent and non-discriminatory competitive environment for the purchase of those goods, supplies and services covered under within the GPA’s schedules.

Secondly, and unlike the EU Public Procurement Directives, the GPA does not  cover private utilities, defence procurement or concessions.  Whilst given the size and clout of the private utilities sector in the UK, it is likely that some liberalisation of the requirements of the current EU Public Utilities Directive (EU/2014/25), the same is unlikely to be true in relation to UK defence and security procurement which has always proved to be a contentious political, as opposed to international trade, issue.

Whilst it is the avowed intention of the current UK government that the role of the European Court of Justice will cease from 29th March 2019, the question of the influence of decisions made by the European Court remain unanswered.  Whilst the supremacy of European Union law will cease, in this increasingly globalised world with its multiple trade and other interdependencies it is clear that UK (be it Scottish, English & Welsh or Northern Irish) jurisprudence cannot exist in a stand-apart legal vacuum.

This is particularly the case for services procurement.  Services are not covered by current GPA schedules, and any UK domiciled business wanting to trade with the remaining EU27 will have to respect and implement the decisions of the European  Court of Justice in order to operate within the EU’s Internal Market.  How that obligation will be squared in practice is a moot point at this juncture.

What is unlikely to change are the broader public procurement policy objectives of promoting good governance, the efficient and effective management of public resources, and the attainment of best value for money and transparency of procurement-related information, irrespective of which electronic procurement portal public contract notices are published in post-March 2019.

For more information:

WTO GPA homepage

Brochure: GPA: Opening markets and promoting good governance

Text of the Revised GPA (6 April 2014 version)

e-GPA portal