Life after Brexit for Public Procurement

Public procurement in the UK is regulated by the Public Contracts Regulations 2015 (the “PCR 2015”), which derive from the EU Public Contracts Directive 2014. The PCR 2015 are domestic law, and will continue to apply to public procurements in the UK after 31 December 2020. That being said, the Government has already announced some amendments to the current regime, with further amendments likely as the new trade landscape becomes apparent.

One aspect of Public Procurement is the OJEU stands for the Official Journal of the European Union (previously called OJEC - the Official Journal of the European Community). This is the publication in which all tenders from the public sector which are valued above a certain financial threshold according to EU legislation, must be published. The legislation covers organisations and projects that receive public money. Organisations such as Local Authorities, NHS Trusts, MOD, Central Government Departments and Educational Establishments are all covered by the legislation.

The laws that govern the UK’s public procurement regime are largely based on EU rules found in several EU directives and the Treaty on the Functioning of the European Union. Broadly speaking, these rules aim to open up public procurement to EU-wide competition. Public bodies must, for example, award public contracts without discrimination on grounds of nationality and advertise their contracts EU-wide via the Official Journal of the European Union (OJEU).

These EU rules have been implemented in the United Kingdom. The key regulation in the United Kingdom is the Public Contracts Regulations 2015 (PCR). Other more specific regulations, like the Utilities Contracts Regulations 2016 and the Concessions Contracts Regulations 2016, govern particular aspects of the regime.

Why public procurement is important:

  • Every year, over 250 000 public authorities in the EU spend around 14% of GDP (around €2 trillion per year) on the purchase of services, works and supplies.
  • In many sectors such as energy, transport, waste management, social protection and the provision of health or education services, public authorities are the principal buyers.
  • The public sector can use procurement to boost jobs, growth and investment, and to create an economy that is more innovative, resource and energy efficient, and socially inclusive.
  • High quality public services depend on modern, well-managed and efficient procurement.
  • Improving public procurement can yield big savings: even a 1% efficiency gain could save €20 billion per year.

New approach post Brexit:

UK Prime Minister Boris Johnson announced on November 29, 2019 that the government would “fundamentally change” public procurement rules to “back British business.” The corresponding press release reportedly criticised the EU-based regulations as “absurdly complex, burdensome and costly” and describes the obligation to advertise in the OJEU as “burdensome and pointless.” Johnson’s announcement follows similar sentiments expressed earlier last year by the prime minister’s chief adviser Dominic Cummings, who characterised the UK’s procurement system as “complex, slow and wasteful.”

Changes have already been made. The Public Procurement (Amendment etc.) (EU Exit) Regulations 2019 have been enacted. This will replace the requirement for public bodies to advertise their contracts in the OJEU. Instead, such contracts will need to be advertised via a new e-notification service called “Find a Tender.”

Once the 2014 EU Procurement Directives came into force, the government prioritised the Public Contracts Directive for early implementation because it would deregulate and simplify the rules for where most procurement spend, and activity takes place. The changes enable buyers to run procurements faster, with less red tape, and with a greater focus on getting the right supplier and best tender in accordance with sound commercial practice. The implementation of the Public Contracts Regulations 2015 took effect from 26 February 2015. Above set financial thresholds, if you are buying supplies, services or works for central government, a non-ministerial department, executive agency, or non-departmental public body, you must follow the procedures laid down in the Public Contracts Regulations before awarding a contract to suppliers.

Changes to the PRC 2015:

From 1 January 2021, contracting authorities:

  • must publish procurement notices through Find a Tender, which will go live on 1 January 2021. This replaces the requirement to publish in the OJEU;
  • must ensure that any third party ‘e-senders’ used to publish notices have confirmed that they can publish notices to Find a Tender;
  • can use Find a Tender to view procurement notices published by UK contracting authorities; and
  • can continue to use existing portals like Contracts Finder to access low value or location specific notices.

Contracting authorities should be aware that any procurements that have not been finalised (i.e. a contract award notice has not been published) by 31 December 2020 will be subject to the existing procurement regulations. The existing PCR 2015 remedies available will also apply to these procurements.

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Kate Higgs

2nd June

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