Public procurement after EU withdrawal

Public procurement after EU withdrawal

The UK-EU Withdrawal Agreement

The Withdrawal Agreement sets out the agreed transitional provisions for those situations, which are currently subject to EU law. This covers the residence rights of EU-27 nationals in the UK and UK nationals living in a member state of the EU-27, and financial and budgetary matters right the way through to detailed technical matters for the commercially minded, such as procurement and data protection. A full analysis would take up more than a bulletin, and like most observers, it is helpful to take the benefit of Professor Steve Peers’ blog on all matters Brexit.

Is it possible to extent the Brexit transition period past 31 December 2020?

As an initial point, it is worth considering how long the transition period will continue in the light of current events. The EU and UK have exchanged draft legal texts; but since then meetings regarding the future agreement between the EU-UK have reportedly been postponed or cancelled. So will we see a repeat of the extended extension deadlines that occurred during the withdrawal process? This seems unlikely, as the position providing for an extension to the two-year withdrawal period under Article 50 of the Treaty on European Union is markedly different from the position for the extension of transition period under the Withdrawal Agreement.

The key difference is that in Article 50 the EU made provision for future extension beyond the two years, subject only to the unanimous decision of the Council of Ministers and the UK to extend the transition period.

By contrast, the Withdrawal Agreement provides for a much more robust position: that there may be a single decision, to be made before 1 July 2020, extending the transition period for up to 1 or 2 years. This carefully negotiated flexibility implements the lessons learned during the previous UK-EU negotiations. It was debilitating for all concerned for all other business to cease while over-ambitious deadline after over-ambitious deadline was agreed and disappointingly failed to be met. This provides a single one-time only extension for a reasonable and realistic period.

And how has the current UK government responded to this carefully negotiated flexibility based on accepting the lessons learned from the previous UK-EU negotiations? By introducing and enacting a law which makes it unlawful for a Minister to agree any extension. So the next key date to look out for is 30 June 2020.

While it might still be legally possible to negotiate an extension after that date, it is unlikely that EU ministers would have any appetite to do this, as it would require a further revision and agreement of the Withdrawal Agreement. 

How will public procurement procedures be affected after the withdrawal agreement ends?

The UK-EU27 Withdrawal Agreement provides for transitional provisions for ongoing public procurement procedures. These are set out in Title VIII: Ongoing Public Procurement.

In summary, these provide that the current procurement rules, which implement EU Directives, continue to apply if the procurement procedure started prior to, or during the transition period.

The definition of the commencement of the procedure is the date when the call or competition or “any other invitation to submit applications” was made. Where the contracting authority was permitted to enter into contracts without a call for competition, the procedure is deemed to have been launched at the time that the authority contacted the potential suppliers under the procedure.

What about existing framework agreements?

Importantly, the rules continue to apply to pre-existing framework agreements; and also to call-off contracts awarded under those framework agreements; and will still be permitted / obliged to use e-Certis, the online database listing the eligibility criteria and documentary evidence required in procurement processes, for a further nine months following the end of the transition period. 

How will the UK procurement rules change after transition period?

Following the end of the transition period, the UK’s procurement rules, which implement the EU Procurement Directives (Public Contracts Regulations 2015), will remain broadly the same. The UK rules will be amended by The Public Procurement (Amendment etc.) (EU Exit) Regulations 2019, which have already been enacted.

These make a number of consequential amendments to the UK’s current procurement regulations. The key changes are:

Revised procurement value thresholds

Under the current procurement rules, the financial thresholds for the application of the procurement rules are re-valorised every two years. The revised figures are published by the European Commission and their sterling equivalent applies under the UK’s procurement rules.

So, for instance, entirely predictably, the procurement thresholds have been revised and apply from the beginning of 2020, as below:

(see table on right)

The power to change the value of these financial thresholds will transfer from the European Commission to the Minister for the Cabinet Office, who will then have the power to amend these values following a review every two years.

New UK e-notification service

The new rules will replace the obligation to publish notices on the EU-wide contracts supplement to the Official Journal of the EU, with an obligation to publish notices on a new UK e-notification service. This new service is not yet up and running.

However, it is clear that this is intended to replicate the Tenders Electronic Daily website, on which OJEU notices are published. It will also be a notification service, which applies in addition to the UK’s existing Contracts Finder website. It will continue to apply and must be used for smaller contracts (which the UK rules require over and above the EU Directives in any event).

New standard forms for public procurement

The standard EU-forms for OJEU notices will no longer apply. Again, there will not be any substantive change to the procurement obligations, but there will be a change to the form (and the forms). The new forms will be published when the UK e-notification service is operational.

In conclusion, there is nothing in the revisions to the procurement regulations that reduce the red-tape, but I think that we can all agree that it is worth seeing the reality of onerous and oppressive EU red-tape being replaced by proudly pragmatic British red-tape.

Contact us

To discuss any of these issues or to consider more general commercial please contact Uddalak Datta or another member of the commercial team in your local office.

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