General Procurement

Brexit: A “historic moment from which there can be no turning back” – but what does it mean for public procurement?

eu-1473958_1920After the referendum result last June and the resulting legal challenges, parliamentary debates, votes and royal assent (not to mention the debates down at the pub and on social media) Prime Minister Theresa May has finally triggered Article 50 notifying the European Council of the UK’s intention to withdraw from the EU. Whichever side of the debate you found yourself on one thing is now clear – the UK is leaving the EU and that is likely to have a huge impact for us all.

Unfortunately, but unsurprisingly, the PM’s letter to the European Council triggering Article 50 made no specific reference to public sector procurement – it’s unlikely to be at the top of any agenda – but point v.i. of her “suggested principle” for the negotiation deals with trade.

If any major change is to come in relation to public procurement it will be as a result on the outcome of the negotiations relating to trade between the EU and the UK. It is important to note that at present and until the negotiations are complete and the UK leaves the EU, the procurement regulations will remain the same. The European Council’s Directive on Public Procurement has been transposed into UK and Scottish law by the current Public Contracts Regulations 2015 and Public Contracts Regulations (Scotland) 2015 respectively. After exiting the EU, the UK will have the option of amending or replacing these regulations but it seems unlikely that they will change drastically.

All EU member states have roughly the same ambitions when it comes to public sector procurement – openness, transparency, fairness, VfM, increasing access for SMEs – and therefore the current regulations were designed with these in mind.

If you were hoping for a removal of perceived EU “red tape” in public sector tendering I believe you’ll be disappointed. Indeed, you may instead experience some “red, white and blue tape” as the UK lawmakers amend the relevant regulations whilst ensuring that all the principles of good public procurement processes remain in place.

If the UK is to become part of the European Economic Area, a status held by the non-EU countries of Iceland, Norway and Liechtenstein then very little is likely to change. The EEA countries are bound by their membership agreement to follow the principles of EU public procurement and all three countries advertise their above threshold procurement requirements in the Official Journal of the European Union (OJEU).

Even if the UK does not join the EEA, it is still a signatory of the World Trade Organisation’s Government Procurement Agreement, which imposes the principles and practices of fair procurement on all its members. The public sector will still need to purchase what it does today and will need to advertise it openly. This may just mean that the opportunities are advertised on national platforms rather than in the OJEU. Either way you can be sure that Tenders Direct will be picking them all up and distributing relevant opportunities to our members!

millstream

2 replies »

  1. Hi Duncan, thanks for the post. You mention that the UK is a signatory of the World Trade Organisation’s Government Procurement Agreement, but is this as a result of currently being an EU member state and if so wouldn’t the UK need to sign the GPA in its own right once it has left the EU to maintain our access to such public sector markets?

    • Hi Ric

      Thanks for getting in touch and it seems you’re absolutely correct. The UK is a member of the WTO in its own right but is only a member of the optional GPA by virtue of being an EU member state. We would therefore need to reapply to the GPA. It seems very unlikely that we would not do so as that would shut UK companies out of lucrative foreign markets. If we were to re-apply I’d imagine we’d be readily accepted as the existing members of the GPA would want to maintain access to the UK market.

      That said, a lot of things that seem very unlikely have actually happened recently so who knows?!

      Regards

      Duncan

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