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There are four different strands to the developing public procurement landscape post-Brexit.
In the short term, the public procurement regime, as set out in the Public Contracts Regulations 2015 (PCR 2015), and the associated concessions, utilities and defence procurement regulations, have continued mostly unchanged from that which applied before 31 December 2020.
The only substantive change was to replace OJEU (Official Journal of the European Union) notices with 'Find a Tender Service' (FaTS) notices. Further details can be found in our ebriefing here.
There are two international treaties the UK has agreed to sign up to:
- the World Trade Organisation Government Procurement Agreement (the GPA); and
- the UK/EU Trade and Co-operation Agreement (the TCA).
Both treaties limit the changes that can be made to the public procurement rules going forward.
The GPA is a free trade agreement promoted by the World Trade Organisation, which regulates 'public procurement'. The GPA consists of:
- a core document, setting out general principles of public procurement that apply to all signatories under the GPA; and
- a schedule with each individual country’s commitments and derogations from the core document. This works on the basis of 'you give what you get', in gaining access to other countries’ public procurement of works, goods and certain services in return for opening up access to the signatory’s own public procurements.
On 1 January 2021, the UK signed up to the GPA based on the same commitments as the EU - which had previously applied to the UK as part of its membership of the EU. When the directive on which PCR 2015 is based was being passed, the EU had to limit some of the changes it was proposing to make to the EU procurement rules so that they continued to comply with the GPA. Having said this, the GPA does give the opportunity for additional flexibilities in the public procurement rules. In particular, the GPA permits:
- the removal of all procurement controls over 'below threshold' contracts;
- simplification of the procurement procedures - which the UK Government is proposing to take advantage of (see below); and
- more flexibility over the procedure for procurement challenges.
The TCA extends coverage of the GPA requirements to additional areas of public procurement. Some of these, e.g. utilities and concessions, are unlikely to be relevant to registered providers and local authorities. However, some of the existing light-touch regime contracts including catering, estate agency and education are covered by the TCA.
Until it is implemented into UK law by specific legislation, the TCA is given direct effect in the UK by section 29 of the European Union (Future Relationship) Act 2020.
Neither the GPA not the TCA require any changes to be made to PCR 2015, but they limit the changes that may be made to them in the future.
UK Internal Market Act 2020 and PPN 11/20
The United Kingdom Internal Market Act 2020 (the IMA) prevents legislative restrictions in one part of the UK which would exclude suppliers from another part of the UK.
Despite this, Procurement Policy Note (PPN) 11/20, issued by the Cabinet Office suggests reserving contracts with a value below the tendering threshold for 'local' suppliers and/or for small and medium enterprises and voluntary, charitable and social enterprises. For further advice on these provisions, see our ebriefing here.
Green Paper – Transforming public procurement
On 15 December 2020, the Government issued a Green Paper setting out its proposals for public procurement reform. This is a Green Paper, and so is the “consultation on ideas” stage of the legislative process.
The consultation closes on 10 March 2021 and we will be responding to the consultation. We are also planning to issue a series of ebriefings on specific elements of the proposals.
In summary, the proposals involve:
- consolidating the procurement regulations for utilities and concessions into a single set of procurement rules;
- reducing the number of potential procurement procedures to three, the open procedure, a procedure equivalent to the light-touch regime procedure (to be renamed the 'competitive flexible procedure'), and the negotiated procedure without advertisement - which will be renamed the 'limited tendering procedure';
- a new regulator with the power to issue improvement notices and impose spending controls;
- creating a list of excluded contractors and having greater scope to exclude contractors for prior poor performance;
- moving from 'most economically advantageous tender' to 'most advantageous tender' as the basis for contract awards;
- allowing 8-year frameworks which new suppliers can join after 3 years;
- substantially increasing the number of notices that are required (linked to Open Contracting Data Standard) but replacing standstill letters with published information in a standard format; and
- revising the challenge process, with the possibility of 'papers only' decisions, a tribunal for lower value challenges and damages being limited to 1.5 times tendering costs plus legal fees.
Do watch out for our ebriefings explaining and commenting on these proposals in more detail.
For more information
For further information in relation to any of the above, please contact your relevant ACS contact or Andrew Millross.
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