European Commission sets out its stall for post Brexit procurement arrangements

You can read the paper here.

It is drafted on the basis of a “no deal” approach and assumes no access to European procurement markets for UK contractors. This clearly depends on the terms of the Brexit negotiations, the outcome of which it is too early to predict.

The approach proposed is based on transitional arrangements that have typically applied when new EU procurement Directives have been brought in.

In particular, it proposes that UK contracting authorities should have continued access to OJEU only for procurement procedures begun pre-Brexit and call-offs from framework agreements procured pre-Brexit. There are a number of problems with this approach:

• For projects supported by European funds, grant conditions often require all procurements to be via an OJEU process. Recipients of these grants will need to submit OJEU notices for these procurements before Brexit. It will be crucial to get these procurements right, since the option of discontinuing a flawed procurement process and starting again will no longer be available post Brexit;
• A number of procurement “tools” (such as the ability to use the e-certis database for selection documentation) that help UK companies tender for European public contracts will no longer be available;
• The UK will need to make alternative arrangements to replace OJEU advertising for new procurements begun on the day after Brexit, given that the Public Contracts Regulations 2015 (which require an “OJEU process”) will be preserved in force by the Great Repeal Act (now rebadged as the EU (Withdrawal) Act); and
• The Commission is proposing that all of the current European legal remedies will continue to apply to procurements begun pre-Brexit. This will require the agreement of the UK Government, which seems currently to be saying that the European Court should have no role post Brexit. It will also mean giving EU contractors access to the UK courts to challenge UK procurements begun and, more controversially, call offs from UK frameworks procured, pre-Brexit.

The Commission’s approach means that the EU procurement rules will no longer apply to contracts procured pre-Brexit once they have been signed and a contract award notice published in relation to them. The Commission is proposing that the cut-off point for the application of those rules will be when the contract is “finalised” i.e. when the contract award notice is published or the procurement is discontinued. However, “substantial variations” to those contracts will still be able to be challenged in the UK courts because of the wording of Regulation 72 of the Public Contracts Regulations 2015, which prohibits variations which are not within the scope of that Regulation.

A lot more work will be needed to arrive at a practical and workable position in relation to EU procurement post Brexit. The Commission’s proposals are their opening gambit in these negotiations.

For more information

Please contact Andrew Millross.