Clearly Brexit is a very hot topic at the moment and most people are probably wondering what it will mean for their lives both personally and professionally. Although public procurement is governed by UK regulations, these originated in EU Directives so we thought it might be helpful to set out our views on how Brexit might affect the service we provide to you through Tenders Direct.
- What happens now?
Well at the moment, nothing changes; this includes the financial thresholds that govern whether a contract must be published at a European level in the Official Journal of the European Union (OJEU). Although the value of the pound has dropped against the Euro following the vote to leave, the exchange rate for procurement purposes is fixed at 2 yearly intervals and so it is not due to be revised until 1st January 2018.
The two year period of negotiations leading to the UK’s exit from the EU will not begin until Article 50 of the Lisbon Treaty is invoked by the UK giving formal notice. In the meantime, the Public Contracts Regulations 2015, the Utilities Contracts Regulations 2016 the Concession Contracts Regulations and the Scottish equivalents of these regulations (“the Public Procurement Regulations“) still apply and are in full force. This means that contracting authorities need to continue to comply with the rules and bidders can continue to enforce their rights if they believe there has been a breach.
- What happens when the UK has left the EU?
The Public Procurement Regulations are all national laws, based on EU Directives. Each Regulation would need to be actively repealed or revised before this situation changes. We think the UK is likely to have more urgent priorities than changing procurement legislation and so any change will probably be quite a few years into the future.
- Will the UK will actively repeal all or some of the Public Procurement Regulations?
There was procurement legislation before the EU Directives and we will still need some form of procurement law – the public sector will still need to purchase supplies, services and works. The UK had considerable input into the existing procurement directives and so it seems likely that future UK legislation will be along the same lines.
It is important to note that some of the UK’s procurement rules do not do not derive from European law and are examples of the importance of public procurement law domestically. These include the National Health Service (Procurement, Patient Choice and Competition) (No.2) Regulations 2013, which legislate how commissioners purchase health services for the NHS, and the regime applying to contracts below the OJEU financial thresholds which is described in the Public Contracts Regulations 2015.
The principles within the Public Procurement Regulations are internationally accepted and therefore the procurement regime is unlikely to change substantially. The World Trade Organisation’s Agreement on Government Procurement (GPA) is already written into the Public Procurement Regulations, sets out many of the basic procurement principles such as the rules on technical specifications and advertisement. Many other jurisdictions which are not part of the World Trade Organisation have similar rules.
- What are the possible changes?
This depends on the outcome of the negotiations and what the Government wishes to achieve.
If the UK negotiates membership of the European Free Trade Association (EFTA) and becomes part of the European Economic Area (“EEA”), nothing is likely to change. EEA countries (such as Norway) have very similar procurement rules which include the requirement to advertise opportunities for public contracts.
If the UK government does not join the EEA, then the WTO’s Agreement on Government Procurement is likely to apply, which again imposes obligations on publicising public contracts.
- Millstream’s Role
In addition to Tenders Direct, Millstream provide the Public Contracts Scotland website for the Scottish Government, the Sell2Wales website for the Welsh Government and the myTenders website for English authorities. These websites give us a direct working relationship with more than 2,500 contracting authorities in the UK and we publish their high value contracts on our websites as well as in the Official Journal, we also publish their lower value contracts on the websites. Regardless of the UK’s relationship with Europe and the Single Market we will still have access to opportunities in Ireland and mainland Europe that are publicised in the OJEU.
No matter what happens to the UK’s obligations to publish contracts in the OJEU, our sources of information will remain secure and so we don’t see that there will be any significant difference in the future to the number and range of business opportunities that we currently provide to you through Tenders Direct.
Millstream has always been closely involved in consultations with the European Commission, the European Parliament, the UK’s Cabinet Office, the Scottish Government and the Welsh Government in relation to new legislation and procurement policy. We intend to maintain all of these relationships, including those with European Institutions, so that we are able to provide you with information and guidance both as the Brexit situation develops and beyond.
If you have any questions or comments please send them to us using the links below and we’ll do our best to answer them quickly and accurately. We’ll publish further information notes as the Brexit situation develops so please ‘Follow’ this blog, or subscribe to the RSS feeds if you’d like to be notified when new information is published.