Following the UK’s exit from the European Union on 1st January 2021, those tendering and bidding for public sector contracts will be keen to learn how Brexit has affected the public procurement regime. This article looks at some of the key changes that have been made and are proposed to be made to the UK’s public procurement process.
At the outset, not a great deal appears to have changed and the UK’s new regime will still need to comply with the World Trade Organisation’s Agreement on Government Procurement (GPA). The GPA has 21 signatories, including the US, EU, Japan, New Zealand and Canada. The UK had to comply with this pre-Brexit, but is now a party to it in its own right. The GPA will guarantee access to £1.3 trillion in overseas public procurement markets, providing major export opportunities for British businesses. The GPA’s rules are less prescriptive than the EU regime, setting out core principles of fairness, impartiality, transparency, and non-discrimination. The new UK regime will also need to comply with the post-Brexit Trade and Cooperation Agreement (TCA) which was given effect from 1 January 2021.
Changes that are effective from 1 January 2021
The regime under the Official Journal of the European Union (OJEU) has been replaced with the UK’s “Find a Tender” service (FTS) which went live on 1 January 2021. Procurements that started before that date should still be concluded using OJEU procedure. Other key changes made are that the value thresholds for advertising contracts are now in pounds rather than euros, power has transferred from the EU Commission to the Cabinet Office and UK law now replaces EU law in governing the procurement regime.
The Green Paper “Transforming Public Procurement”, which came out in December 2020, proposes to revamp the procurement framework by getting rid of the red tape and “bureaucratic, process driven procedures” of the EU regime. The Green Paper is at consultation stage until 10 March 2021 and can be accessed here. Some of the key proposals are:
- To narrow and simplify the current procedures down to the following three:
- a new flexible procedure that gives buyers freedom to negotiate and innovate to get the best from the private, charity and social enterprise sectors.
- an open procedure that buyers can use for simpler, ‘off the shelf’ competitions.
- a limited tendering procedure that buyers can use in certain circumstances, such as in crisis or extreme urgency.
- To allow below threshold contracts to be reserved for UK suppliers, which will help UK based SMEs win government work.
- In deciding the best tender, social and environmental conditions will be taken into account, rather than just economic factors. There will also be a central register of suppliers who have poorly performed in the past – a naughty list- which will make evaluation of poor performance much easier.
- For those parties using framework agreements, the proposal is to have two types; one up to four years’ long and another that is up to eight years long, with an initial three year closed period with the option to add extra suppliers for the remaining five years. There will be more flexibility given to parties in amending contracts – this is something which has been quite tricky to do under the EU regime.
Advice to bidders is to ensure you have appropriate searches in place on FTS in order to monitor contract opportunities (you can find this on the FTS portal, linked above). You will need to register with FTS to use the new service. Contracting authorities will also need to register in order to advertise contracts.
It is still very early days, pending approval of the Green Paper. However, although not a great deal has changed at present, if successful the new regime could be simpler and afford more flexibility to Contracting Authorities and bidders alike than the EU regime, which will be mostly welcome for those involved in public procurement.
This is only intended to be a summary and not specific legal advice. If you would like further information or advice on Construction Law, please do contact a member of our Construction team.