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Public procurement following the expiry of the transition period

View profile for Laughlan Steer
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It is January 2021 and the transition period for the UK’s withdrawal from the EU has just expired.

The legislation governing the requisite changes to our procurement regime is The Public Procurement (Amendment etc.)(EU Exit) Regulations 2020 (the “Exit Regs”). Further amendments to the Public Contracts Regulations 2015 (“PCR 2015”), our public procurement regime, may be inevitable as our procurement processes diverge further from EU policy. Membership of the WTO General Procurement Agreement (“GPA”) may preclude radical divergences, however.

What is the immediate impact of the Exit Regs?

Taking control of currency thresholds and EU defined terms top the agenda. Unsurprisingly, the UK Government will now set the currency in pounds sterling with thresholds being reviewed bi-annually by the minister for the Cabinet Office. The first such review is expected in August 2021. As for the definitions, the relevant domestic equivalents will replace definitions such as “the Commission”, “the Council” and “Europe”.

Given that contracting authorities will not be able to access the OJEU, they must instead use what is known under the Exit Regs as the “UK e-notification service” being the new Find a Tender Service.

What does this mean for current tenders?

Any tender process or framework arrangement on-going at 31 December 2020 must continue to adhere to the EU rules which applied at its commencement. By way of example, a UK entity bidding on an EU contracting authority’s tender in December 2020 should be afforded parity of remedies with other EU bidders in 2021 and beyond. Conversely, any UK contracting authority issuing a tender in December 2020 must continue to apply the EU procurement rules to that tender even if the UK were to alter its domestic procurement processes thereafter.

How do these changes interface with the GPA?

Having announced in October 2020 that it had secured access to join the GPA independently, the UK is expected to join later this month on the same level of commitment as the EU.

While this is obviously good news, there remains a discrepancy between the ambit of GPA membership and that of the EU. In those areas where the scope of the GPA does not apply, or is simply narrower than the EU procurement regime, there will be no obligation for EU contracting authorities to permit tenders from UK businesses. The regimes differ in the following areas:

  • Contracts which fall “below threshold” – the EU procurement regime requires such contracts which are also of “cross border interest” to be advertised and competition undertaken in a fair and transparent manner.
  • Defence and utilities contracts – although the GPA does provide for these, its scope is somewhat limited by comparison the EU regime.
  • Services concessions – those contracts typically offering a private entity (as concessionaire) the right to manage, say, a fitness centre, and generate revenue from customer fees, a portion of which is split with the relevant contracting authority.    
  • Services under the EU’s “light touch” arrangement – those services of less interest to cross-border competition, including certain social, health and education services.

This guide is for general information only and should not be relied upon as providing specific legal advice.

UK-EU - Trade and Cooperation - Legal Services from Goodman Derrick

The Brexit transition period has ended and the UK Government and the European Commission has announced the terms of our new trading relationship in the draft Trade & Cooperation Agreement (TCA).

The TCA is wide-ranging and includes terms on trade in goods and services, economic and social co-operation, law enforcement and security co-operation and governance.

There is now no doubt that the UK’s relationship with the EU has changed for good, there will be both new legal risks and commercial opportunities for your business in the months and years ahead – is your business ready?

Please click here to see how we can help you navigate the challenges, manage the uncertainty and exploit new commercial opportunities.

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