In this update we discuss the key legal and practical changes faced by UK/EU suppliers competing for regulated contracts after the end of the Brexit transition period. The UK Government has already published extensive plans to overhaul the UK regime, but those changes are unlikely to be effective for many months to come - so what has changed for suppliers from 1 January 2021?
In short, for above-threshold regulated procurement, there is currently very little practical change in terms of processes and procedures. However, suppliers do now need to consider three key questions when assessing which post-Brexit rules apply:
- Is the procurement in the UK or
an EU member state?
UK suppliers no longer have an automatic right to compete for EU-wide tenders (and vice versa). Instead, this will depend on the contract value, whether it is a "covered procurement" under the WTO Government Procurement Agreement ("GPA") as enhanced by the new EU-UK Trade and Cooperation Agreement ("TCA") and, if a UK supplier, whether it has an EU establishment.
- If a UK procurement, was it
commenced before the end of the transition period (i.e. 11pm, 31
If the UK procurement was commenced before the end of the transition period, the EU regime will continue to apply until the contract is awarded. This is particularly significant for framework agreements, as contracts called off after 1 January 2021 will remain governed by the EU regime until the original framework expires.
- Is the procurement
If the procurement is a regulated above-threshold tender, it appears to be largely business as usual, subject to some practical changes: the TCA broadly preserves UK suppliers' rights and remedies when bidding for EU-wide tenders (and vice versa). However, UK contracting authorities can exercise more discretion for below-threshold procurement where, most importantly, the remedies available to all suppliers are weaker.
We've created a 'Quick Guide to Post-Brexit Procurement' at the end of this update to help identify which rules apply to EU/UK procurement procedures from 1 January 2020.
Key changes for above-threshold procurement
Post-Brexit, the GPA governs access to regulated EU-wide contracts by UK suppliers (and vice versa). The GPA provides the basic framework for access to national procurement by suppliers based in other GPA States. The EU is a GPA member and the EU procurement regime is considered to comply with the minimum standards set out in the GPA.
The UK is no longer directly bound by the EU regime. However, as the UK has joined the GPA in its own right, it is bound to the minimum standards of the GPA from 1 January 2021. The UK regime - mainly set out in the Public Contracts Regulations (the "PCRs") - directly transposed the EU regime prior to Brexit, so it is already GPA-compliant and no immediate changes are required.
However, only certain public contracts fall within the GPA, which expressly excludes/includes certain contracts for works, services, concession and public utilities tendered by the public bodies of the GPA states. A contract that is expressly included within the Schedules to the GPA is known as a "covered procurement". The UK has adopted the lists and thresholds currently set out in the EU Schedules.
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Originally Published on February 10, 2021.
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