The UK gears up for public procurement outside the EU

The post below was first published on our Competition blog

The Government continues to prepare the ground for the regulation of public procurement after the post-Brexit transition period expires on 31 December 2020.  On 19 November it enacted the Public Procurement (Amendment etc.) (EU Exit) Regulations 2020) (PPAR 2020).  These amend the existing UK procurement regulations in order to reflect the fact that the UK will no longer be bound by EU law from 1 January 2021.  From that date, public contracts will have to be published on the UK's new Find a Tender Service (FTS), instead of in the Official Journal of the EU (OJEU).

The amending regulations prepare the ground

The way in which public money is spent has been in the spotlight recently thanks to press headlines about the award of lucrative Government contracts for Personal Protective Equipment.  Public procurement is currently regulated in the UK by the Public Contracts Regulations 2015 (UCR), the Utilities Contracts Regulations 2016 (UCR) and certain related regulations.  Although based closely on EU Directives, these UK regulations will remain in force for the foreseeable future.

The PPAR 2020 will amend the PCR and UCR from 1 January 2021 in order to adapt them to the post-Brexit reality.  The most important change is that public and utility contracts will no longer have to be advertised in the OJEU.  Instead, the PPAR 2020 provide that any public procurement processes commenced on or after 1 January 2021 have to be advertised in the Find a Tender Service (FTS), which is a new e-notification system for UK contracts.

The PPAR 2020 also provide that procurement procedures and framework agreements commenced before 1 January 2021 but running beyond that date, will continue to be subject to the pre-2021 rules.  This means that a two-tier system will be in place for some time.

The PPAR 2020 also introduce various other, more cosmetic amendments.  For example, they provide for removal of the current references to the European Commission, the EU Treaties, the European Single Procurement Document and procurement involving contracting authorities from other EU member states

More substantial reform in the pipeline?

In late 2019, the Government made a one-off pre-Election announcement about its intention to reform procurement law, post-Brexit.  We wrote about this here.

The Government announcement criticised the current EU-based procurement rules as being too complex and expensive.   It promised to replace the existing regulations with a new regime which would be simpler, cheaper and more geared towards promoting British business and the local economy.  However, the announcement did not give any further details.

Furthermore, it was not made clear how any new procurement regime would fit with the UK's ongoing membership of the WTO Agreement on Government Procurement (GPA).  The GPA reduces the UK's room for manoeuvre, as it imposes obligations of non-discrimination and transparency that are very similar to those underlying the current rules.

Since the 2019 announcement, there has been radio silence from the Government on this initiative.  Covid-19 has inevitably been a huge distraction.  HMG may also have been waiting to see the outcome of the negotiations for a EU-UK trade deal, which may include certain reciprocal commitments to maintain a level playing field in public procurement.

The picture is likely to become clearer in 2021, when the Government is expected to put forward a Procurement White Paper, consulting stakeholders on the options for overhauling the public procurement regulations.  Watch this space!