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Public procurement in the UK post-Brexit: What public bodies and suppliers need to know

01 December 2020
From 23:00 on 31 December 2020, a new e-notification service called Find a Tender will replace Tenders Electronic Daily (i.e. the old Official Journal of the EU or "OJEU") for the publication of public sector contract opportunities. This development is one of a number of changes the UK public procurement regime faces as a consequence of the end of the UK's transition period following Brexit. In this article, we examine other potential changes which may be introduced, particularly in light of the UK's accession to the GPA.

Find a Tender Service (FTS)

The recently published PPN 08/20 has confirmed that from 23:00 of 31 December 2020 a new e-notification service, 'Find a Tender', will be used to post and view public sector procurement notices. This service will replace the existing requirements to publish notices in the Official Journal of the European Union (OJEU). 

Public bodies that use a third party ‘eSender’ to manage procurement notices will only be able to continue to use them provided the relevant eSenders have integrated with Find a Tender. In a guidance note dated 10 November 2020, the Cabinet Office has provided a list of eSenders that have integrated with the Find a Tender Service. Public bodies that do not use an eSender (or who use unintegrated eSenders) will need to register with the service in order to publish tenders directly. This can be done by creating a buyer’s account on Contracts Finder. Furthermore, all existing Contracts Finder accounts will automatically be given access to publish notices on Find a Tender.

For ongoing procurements which commenced before the end of the Brexit transition period, public bodies should continue publishing notices relating to those opportunities in the OJEU (e.g. where a contract notice was issued in late 2020 but the contract will be awarded in 2021). The Cabinet Office also asks for these to be sent to FTS but this is not a legal requirement.

Government Procurement Agreement (GPA)

While the above described changes are relatively straightforward, it is important to bear in mind that these are just the first amongst a number of potential changes that may be introduced in the New Year. 

In October 2020, it was announced that the UK would be joining the Government Procurement Agreement (GPA) at the end of the Brexit transition period. The GPA is the procurement agreement within the framework of the World Trade Oreganisation (WTO), to which the UK will soon become an independent member, having previously been represented in the WTO as a collective via its membership of the EU. The UK's accession to the GPA is significant as it sets the stage for a number of more material changes to the wider public procurement regime. 

As a member of the EU, public procurement in the UK has hitherto largely been regulated by EU rules, deriving from a series of specific EU Directives and the Treaty on the Functioning of the European Union (TFEU). One of these Directives was the Public Contracts Directive 2014/24/EU (the "PCD") which was codified in England and Wales in the Public Contracts Regulations 2015 (the "PCR 2015"). 

The terms of the PCD (and by extension the PCR 2015) are subject to the GPA, a plurilateral agreement within the framework of the WTO aimed at mutually opening government procurement markets among its parties by ensuring open, fair and transparent conditions of competition in the government procurement markets of its 48 signatories.

As per the terms of the TFEU, the UK had been part of GPA through its EU membership and not a party in its own right, meaning that its engagement with other GPA members was subject to the terms agreed by the EU on behalf of all its member states. However, in preparation for the end of the UK-EU transition period, the UK government has confirmed its membership of the GPA as a fully independent member.

In achieving its aim of mutually opening up government procurement markets among its members, the GPA contains a set of minimum procurement standards which all signatories to the agreement must commit to. As a signatory to the GPA, many significant UK public procurement opportunities will therefore need to continue to be open to suppliers in other GPA member countries such as Canada, Hong Kong and the US. The GPA is comprised of two parts: 

  1. The main rules which establish minimum standards for ensuring non-discriminatory and transparent award procedures as well as remedies for mistreated suppliers; and

  2. The market coverage schedules for each GPA party, which set out what procurement opportunities (including categories of contracting authorities, goods, services and works, value thresholds and any exceptions) each member country has agreed to open up to other GPA parties (and therefore be subject to the agreed standards of non-discrimination and transparency). The UK is currently in the process of agreeing the content of its market coverage schedule ahead of its accession to the GPA, albeit as a former member through the EU this should not require material change.

In formulating the PCD, the EU built on the minimum standards of the GPA (to which it was a signatory) by adding a number of additional rules which were ultimately flowed down into UK law via the PCR 2015 (and its Scottish and Northern Irish counterparts). However, with the UK's accession to the GPA as an independent nation, the UK government is, in theory at least, at liberty to strip back any additional rules in the PCR which are over and above the minimum standards set out in the GPA.

In attempting to understand what kind of changes to the UK procurement regime may be introduced after Brexit, UK policy-makers will need to distinguish between (i) the aspects of the current UK procurement rules which derive from the minimum standards set out in the GPA; and (ii) the aspects of the PCR 2015 which derive from the more robust regime adopted by the EU in its formulation of the PCD.

The fundamental principle of the GPA is that where the procurement of particular goods, services or works are covered by the terms of the GPA, the procuring part cannot discriminate in favour of domestic entities or between entities of different parties to the GPA. This fundamental principle should, therefore, continue to apply to any future post-Brexit UK procurement regime (for as long as the UK remains party to the GPA). 

Broadly speaking, the GPA sets out various rules relating to the tendering process, including:

  • public bodies must publish a notice specifying the goods, services or works to be procured (Article VII, GPA) on a freely accessible platform;
  • public bodies have a choice of 3 broad categories of procurement procedures. They may either use "open tendering", under which all interested suppliers may submit a tender; "selective tendering" under which only qualified suppliers are invited to submit a tender; or "limited tendering" under which the procuring entity contacts specific suppliers of its choosing. The more specific conditions attached to these procedures are set out at Articles IX and XIII of the GPA;
  • public bodies must observe a number of specific rules aimed at preventing discrimination between suppliers which regulate the process of negotiations, impose minimum deadlines for the tendering process, and regulate how public authorities set out their technical specifications (Articles X-XII, GPA); and
  • all member countries must also provide domestic review procedures which allow suppliers to challenge decisions made in relation to the tendering process (Article XVIII, GPA).

While the GPA is not very prescriptive in relation to how its member nations choose to implement the above rules into their local procurement regimes, public bodies and suppliers can expect the above listed principles to continue to be broadly incorporated in the UK's post-Brexit procurement regime. 

Potential changes to the UK regime

As the PCR 2015 include a number of provisions which are not strictly required under the GPA, some of the changes that public bodies and suppliers could potentially see (in due course) include:

  • Below threshold coverage under the GPA: Unlike the PCR 2015, the GPA does not mandate any rules covering below threshold contracts. It is possible that the obligations of public bodies in relation to below threshold procurements may be modified;
  • Rules relating to contract modification: Although the GPA contains transparency rules in relation to advertising and competition, it does not contain any explicit detailed rules on modifications to concluded contracts (such as are currently set out in regulation 72 of the PCR 2015);
  • The choice of procedures: The current list of procedural options may be simplified to just 3 broad categories: "open", "selective" and "limited" by bringing the current "restricted", "negotiated" and "completive dialogue" procedures under one "selective" banner;
  • Remedies and procedures for challenge: The GPA is not as prescriptive as the PCR 2015 in relation to remedies available and the procedures employed by member states in dealing with challenges. There could be a change in the legal body responsible for dealing with procurement challenges in the first instance. Furthermore, as the only remedy mandated by the GPA for aggrieved suppliers following a breach of the rules by public bodies is damages, other current remedies such as declarations of ineffectiveness, may be removed or modified; and
  • Scope of coverage: The list of public bodies, goods, works and services subject to procurement rules may be varied depending on the UK's finalised market coverage schedules.

The above list of potential areas of change are by no means exhaustive and are, at this stage, speculative. The Prime Minister has, however, expressed a desire to "fundamentally change" the public procurement rules in the long term. Nevertheless, assuming that the essential structure of the rules ( i.e. the GPA minimum standards of open, fair and transparent tendering of public contracts) stay in place, it remains possible that the changes introduced by the UK Government will ultimately prove to be less of a radical overhaul of the procurement rules and instead serve to provide much needed clarity on certain areas of ambiguity under the current rules. It is also important to note that unlike the State aid regime, as of 1 January 2021, the PCR shall continue to remain in force unless and until revoked by subsequent legislation by the UK Parliament. 

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