BREXIT - public procurement

Monday 9 November 2020

Although COVID-19 Lockdown Two and the US elections are headline news, Brexit is still rumbling on in the background.

Urgent negotiations continue between the UK and the EU in the penultimate month before the Brexit transition ends on 31 December. It is not yet known if a trade deal will be reached or whether the UK will have to trade on World Trade Organisation (WTO) terms from 2021.

What does this mean for public procurement?

Current procurement rules originate from EU Directives, so it is likely there will be some adjustments next year.

The Public Contracts Regulations 2015 gave domestic law standing to the EU Directives and came into force in England and Wales on 26 February 2015. Contracting authorities are subject to this domestic legislation.

The Withdrawal Agreement provides that the UK will adhere to EU rules until the end of the transition period (to 31 December 2020). The UK passed its own legislation to reflect the Withdrawal Agreement, namely the EU (Withdrawal) Act 2018, which protects EU derived domestic legislation until such time as it is changed. So, during the transition period, the Public Contracts Regulations 2015 have continued to apply to UK procurement.

Amendments to domestic legislation

The UK Government does not intend to make wholescale changes to the current legislation prior to the end of the transition period. If there are amendments, they are likely to be statutory instruments to ensure the current domestic legislation continues to operate effectively after the end of the transition period.

Beyond the end of the transition period, it is entirely a matter for the UK Government whether they repeal the current Public Contracts Regulations 2015 or make amendments.

Post-Brexit procurement rules

The UK Government did not include procurement in its mandate for a future relationship with the EU. Procurement has not been on the top of the Government’s agenda.

This could imply that the UK would prefer its relationship to be governed by the Government Procurement Agreement (GPA) as it is less prescriptive than EU regulations and provides greater flexibility on how public bodies conduct procurement.

Market access is a significant concern. During the transition period UK economic operators can access (for the purpose of procurement) the EU 27 member states’ procurement markets and the non EU member states’ procurement markets which have agreements with the EU, for example Canada.

This arrangement only lasts until the end of the transition period – 31 December 2020. In the absence of a trade agreement that contains provision for public procurement, the UK will fall onto the WTO rules after that date.

The GPA has been negotiated within the auspices of the WTO, but not all WTO members are members of the agreement as it is optional.

The UK’s application for membership of the GPA in its own right was approved by the WTO in February 2019. Therefore, in the absence of a trade deal with the EU, all is not lost as the UK will have (by virtue of its GPA membership status) access to all 27 EU member states’ procurement markets and 18 other non EU countries’ procurement markets.

Membership of the GPA has offered a swift path to mutual market access. Without applying to be a member of the GPA in its own right, the UK would have reverted to WTO rules. This would have resulted in no mutual rights of access to public procurement markets.

Activities can be added to the UK’s GPA schedule if the UK wants to expand coverage of the public procurement market access. However, membership of the GPA does not give the UK the same level of access to procurement markets it had as an EU member.

Developments ought to be monitored closely during this transition period and into 2021.

Jacqui Bickerton, Principal Associate, Weightmans LLP (jacqui.bickerton@weightmans.com)

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