Procurement: Brexit – all bases covered?

Despite the apparent political uncertainty, what is currently clear is that the rules governing public procurement will remain largely unchanged for the time being, meaning that contracting authorities will need to continue to advertise above threshold opportunities and follow a regulated procedure. For bidders, the same remedies and right of appeal through the Courts will continue.

1. If the UK leaves the EU with a deal, the public procurement regulations will remain broadly unchanged during the implementation period (i.e. until 31 December 2020). The existing scheme of UK procurement rules, which implement the EU public procurement directives, will be preserved under the European Union (Withdrawal) Act 2018 when the UK leaves the European Union.   A link to 2 page Cabinet Office Guidance on procurement in the event of leaving with a deal can be found here. https://www.gov.uk/guidance/public-sector-procurement-under-the-eu-withdrawal-agreement
2. If the UK leaves the EU without a deal, the public procurement regulations will remain broadly unchanged after EU exit at 11pm on 29 March 2019. The government has published guidance on Brexit in the event of a no-deal. https://www.gov.uk/guidance/public-sector-procurement-after-a-no-deal-Brexit
3. Towards the end of December 2018, the government also published draft Regulations amending the Public Contracts Regulations 2015, which will apply in the event of a no-deal Brexit. http://www.legislation.gov.uk/ukdsi/2019/9780111176788/contents

 

What do the Draft Public Procurement (Amendment etc.) (EU Exit) Regulations 2019 say?

The amendments are aimed at ensuring that the current legislation continues to operate effectively after the UK leaves the EU. In most respects, the framework and principles underlying the current procurement regime remain unchanged.

The amendments relate primarily to the

• Public Contracts Regulations 2015 (PCR) [1]
• Concession Contracts Regulations 2016 [2]
• Utilities Contracts Regulations 2016 [3]

In the event of a no-deal Brexit, most of the amendments will come into force on “exit day” (currently 11 p.m., 29 March 2019). They apply principally to England, Wales and Northern Ireland. The Explanatory Memorandum to the draft 2019 Regulations confirms that further guidance will be published.

If a Withdrawal Agreement is agreed with the EU on the current terms applying to public procurement, the draft 2019 Regulations are likely to be amended, withdrawn or revoked. In the longer term, however, there will need to be changes to our legislation to reflect the final deal done.

 

Reasons for the amendments

As mentioned above, the amendments are aimed at ensuring that the current legislation continues to operate effectively after the UK leaves the EU. For example, references to publication of notices in the Official Journal of the EU (OJEU) have been replaced by references to the planned new UK-e-notification service. The amendments also address issues arising from the UK’s anticipated participation, in its own right, of the World Trade Organisation’s Government Procurement Agreement.  This means, for example, that parties to the GPA are afforded the same rights and remedies as the UK currently grants to GPA members thought its current participation in the GPA as an EU member state.  

 

Summary list

A short summary list of amendments which are likely to be of most immediate practical interest to public sector contracting authorities, in the event of a no-deal Brexit, is set out below:

 

UK e-notification service

• Contracting opportunities that would have been published on OJEU/TED will be published on the new UK e-notification service. This is in addition to publication on relevant national portals such as Contracts Finder, Sell2Wales or e-TendersNI.
• The standard EU contract notice forms will not be used for new UK e-notification service.

Review of Financial thresholds

• Currently the European Commission deals with the review of the financial thresholds every two years to correspond with the GPA thresholds and conversion to sterling values. This role is transferred to the Minister for the Cabinet Office, with powers to make regulations following a biennial review.

Exclusion and selection

• Grounds for exclusion: The mandatory ground for exclusion for conviction of fraud affecting the European Communities’ financial interests (PCR57(1)(e)) will not apply to procurements commencing after exit day
• ESPD: references the ESPD have been replaced and now refer to a “Single Procurement Document” (SPD)
• e-Certis: Contracting authorities will not be required to use the EU’s e-Certis system to check documentary evidence, where relevant.

Abnormally low tenders and State Aid

• The provisions in PCR 69(6) concerning potential rejection of an abnormally low tender where State aid is involved are deleted, although it should be noted that a new UK State aid regime is envisaged.

Transitional provisions

• There are detailed provisions covering which version of the PCR[4] will apply to procurements which could, potentially, fall within either the current PCR or the PCR as amended by the draft 2019 Regulations. The transitional provisions include a definition of a procurement which “has been commenced” and lists the amendments which will not affect procurement commenced before exit day. They also cover a number of specific circumstances such as where a contracting authority publishes an OJEU contract notice before exit day in the OJEU but awards the contract after exit day and contract modifications to existing contracts made after exit day.

 

Other amendments

The draft 2019 Regulations also make amendments to other primary and secondary legislation. For example, amendments to the Equality Act 2010 and the Public Services (Social Value) Act 2012 replace existing references to EU legislation with national legislation, amend the definition of public procurement functions and refer to the UK E-notification service.

Separate draft Regulations has been published dealing with amendments to the Defence and Security Regulations 2011[5].

Follow this link to access the draft 2019 Regulations and Explanatory Memorandum

 

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[1] The Public Contracts Regulations 2015 SI 102 (as amended)         

[2] Concession Contracts Regulations 2016 SI 273

[3] Utilities Contracts Regulations 2016 SI 274 (as amended)

[4] And/or other procurement legislation, such as the Concession Contracts Regulations 2016,  where relevant

[5] Defence and security Public Contracts (Amendment) (EU Exit) Regulations 2019 http://www.legislation.gov.uk/ukdsi/2019/9780111176764/contents