It will not have escaped your attention that the UK will leave the European Union at 11 p.m. GMT (midnight CET) on January 31, 2020. What are the implications for public procurement? Regardless of whether you are a contracting authority, utility or bidder in a regulated procurement process the key points are:
- On a day-to-day basis nothing will immediately change – your obligations (and rights) remain the same.
- The current position will continue to apply, at least, until December 31, 2020.
- EU procurement law will continue to apply, at least to a time-limited extent, even after December 31, 2020. This is because the UK / EU Withdrawal Agreement makes provision for this. This is relevant to procurements that are commenced prior to that date.
- The various procurement regulations (e.g. Public Contracts Regulations 2015, the utilities and concessions rules and Scottish equivalent regulations) will then continue to have effect as part of domestic law. These rules will thereafter apply until updated or amended by subsequent legislation.
- The future shape of procurement
regulation in the UK will depend on four main interrelated
- The WTO Government Procurement Agreement which will provide a baseline set of obligations.
- The terms of any trade agreements, perhaps, most obviously, the terms of a UK / EU trade agreement.
- The UK's domestic reform agenda – a view that the current regulations are sub-optimal in some respects is evidently held in some quarters in government (the view that the current Directives have not achieved their stated aim of simplification is also widely expressed within the EU).
- The desirability of a common UK regulatory framework balanced against the current devolved regulatory position particularly as regards Scotland, but also to an extent Wales.
What Happens Next – the Legislative Mechanics?
Articles 75 – 78 of the October 2019 Withdrawal Agreement address procurement. Article 75 defines the rules within scope of the agreement, broadly the public sector, utilities and concessions Directives and various sector-specific procurement rules such as Regulation 1370/2007 for public passenger transport services by rail and road.
Article 76 then goes on to provide that these rules shall apply and continue to apply to any procurement procedure launched during the transition period – that is on or prior to 31 December 2020.
There are special rules for framework agreements – the rules continue to apply to unexpired frameworks, even after the end of the transition period, and to any framework where the process to establish it has been launched during the transition period. In the public sector, this will mean that these rules may continue to impact into the mid-2020s. For utilities, where longer-term frameworks are permitted, impacts into the late 2020s are not unrealistic.
Article 77 briefly sets out that the remedies regime shall apply to any public procurement procedures falling within the ambit of Article 76. Finally, Article 78 allows for time-limited access to E-Certis beyond the transition period for unfinished procurements.
Under the provisions of the European Union (Withdrawal) Act 2018 (EUWA), when the UK exits the EU, EU law in force on IP completion day will be retained in UK law. Effectively, the UK will take a snapshot of EU law in force on IP completion day and absorb it into UK law. Under the Withdrawal Agreement, that "snapshot" process will happen on 31 December 2020 at the end of the transition period.
From then, generally speaking, EU laws on-shored in UK law (“retained EU law” or EU-based UK law) are likely to remain broadly the same. This will include current procurement laws such as the Public Contracts Regulations 2015. There would then be a requirement for new legislation to bring about subsequent changes.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.