Under most construction contracts, the contractor takes on the ground conditions risk. However, a recent case has demonstrated that the risk can fall on the employer.
The GPA is a free trade agreement promoted by the World Trade Organisation (“WTO”) that regulates “public procurement”. Alongside the EU Treaty, the GPA forms the basis of the UK’s public procurement rules, as set out in the Public Contracts Regulations 2015 (“PCR 2015”) and the accompanying utilities, concessions and defence procurement regulations. The GPA is seen very much as the “no-deal” option; being the minimum arrangements the UK is likely to put in place post-Brexit if it proves impossible to agree any other “trade deals”.
The GPA consists of:
- a Core Document, setting out general principles of public procurement that apply 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 procurement.
Interestingly, 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.
The Schedule to the GPA that applies to the UK at the moment is the EU Schedule, which will no longer apply post-Brexit since the UK will not be part of the EU. The UK will, therefore, need to negotiate its own Schedule of commitments and derogations.
In order to start this process, the UK government and the EU have written to the WTO to propose that the UK adopts a Schedule that is identical to that of the EU. Whilst this is a sensible transitional measure, it does mean that there are unlikely to be major changes to PCR 2015 anytime soon after Brexit. This is because PCR 2015 will almost certainly be retained in their current form, as far as possible, to demonstrate the UK’s compliance with the GPA.
To discuss any of the topics raised in this briefing, please contact Andrew Millross.
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