Brexit - Procurement

Critical issues for businesses to consider:

• New UK Regime: The transition period for the UK’s exit from the EU ended on 31 December 2020. By default, all existing EU Treaties, EU free movement rights and the general principles of EU law no longer apply in relation to the UK. This means that all procurements carried out by UK contracting authorities are now subject to existing UK procurement regulations.

• Public Procurement (Amendment etc.) (EU Exit) Regulations 2020: In March 2019, in order to ensure that the existing UK public procurement regime would continue to function properly after the end of the transition period, the UK Government enacted the Public Procurement (Amendment etc.) (EU Exit) Regulations 2020. Despite affecting a number of existing statutes by removing EU-specific references and replacing them with UK references and introducing a new e-notification platform for advertisements, the UK public procurement regime remains largely unchanged. 

• Agreement on Government Procurement (GPA): The GPA is a formal agreement which requires its members to ensure open, fair and transparent conditions of competition in the public procurement market. Whilst previously a party to the GPA as an EU member, from 1 January 2021 in order to maintain access to the government procurement markets of other member states the UK switched to being a party in its own name as an independent nation. As the Public Contracts Regulations 2015 (PCR) (the primary legislation governing public procurement in the UK) directly transposed the EU regime prior to Brexit, the UK, as an independent party, was already compliant with the minimum requirements of the GPA and no immediate changes were required.

• Access for Tenderers to the UK market: The UK will give economic operators from other countries, that are a party to the GPA (which includes the EU Member States), continued access to the UK public procurement market after its withdrawal from the EU.

• Trade and Cooperation Agreement (TCA): The EU and the UK negotiated the TCA which took effect from 1 January 2021. Principally, the public procurement provisions of the TCA serve to incorporate and apply many of the substantive obligations of the GPA, extending the types of public procurement to which EU and UK businesses will have access. Broadly speaking, the TCA preserves much of the access that UK tenderers currently have to EU procurement markets and vice versa. The UK Cabinet Office confirmed in a Procurement Policy Note published in February 2021 that “contracting authorities are obliged to apply the rules set out in the TCA to all covered procurements. The procurement rules are set out at Title VI (Public Procurement) and are largely consistent with our domestic regulations”.

• The UK Public Procurement Bill: The UK Government recently proposed significant reforms to its public procurement regime. In May 2021 it was announced in the Queen’s Speech at the opening of Parliament that the UK Government intends to “consolidate 350+ EU derived regulations and create a single, uniform framework to allow more freedom for suppliers and the public sector to innovate and work in partnership with the private sector”. The purpose of the Bill is to “reform the UK’s public procurement regime, making it quicker, simpler and better able to meet the country’s needs while remaining compliant with our international obligations. This will replace the current regime which was largely transposed from EU procurement directives”. Further information on the proposed Bill can be found in the UK Government’s background briefing document found here.

• Access for Tenderers to the UK market: EU and other third country tenderers are now subject to the rules of the GPA and TCA when tendering for UK contracts covered by the GPA or TCA. This means that EU and third country tenderers can still compete for UK contracts but their rights will be based on UK domestic legislation deriving from the GPA and the TCA rather than EU procurement law. Where a contract is not covered by the GPA or the TCA, a UK contracting authority is not obliged to allow an EU or other third country business to tender and vice versa.

• UK Tenderers: The TCA preserves much of the access that UK tenderers currently have to EU procurement markets. When tendering for EU contracts covered by the GPA or the TCA, UK tenderers will be subject to the rules of the GPA and the TCA in the same manner as EU contracting authorities. However, where a contract is not covered by the GPA or the TCA, EU contracting authorities are not obliged to allow UK economic operators to tender. In addition, the ability of UK tenderers to tender for certain supply contracts under the Utilities Directive and for EU security and defence contracts is now limited.

• Remedies: In the UK, whilst the PCR will continue to govern domestic procurements, the procurement of international contracts will be governed by the GPA and the TCA. Fortunately the remedies provisions in the TCA are far more prescriptive than those in the GPA. The UK Cabinet Office recently confirmed that where a contract is covered by the TCA, the UK is required to ensure that EU bidders have the same remedies as UK bidders. However where a contract is not covered by the TCA, the PCR does not guarantee access to the same remedies for EU or other non-UK bidders. Therefore for covered procurements the remedies available under the new UK regime, which is pending further reform, remains largely the same as those under EU procurement law.