19 October 2018
The UK is due to leave the EU on 29 March 2019 and recent weeks have seen an increasing shift towards the possibility of a no-deal Brexit. How would a no-deal Brexit affect public bodies, suppliers and other contracting authorities in terms of their obligations under the procurement rules? On 13th September 2018 the UK Government published guidance with regards to accessing public sector contracts if there is a no-deal Brexit.
OJEU and Public Contracts Scotland
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At present, as a business registered in the EU, you have the right to compete for public contracts in other EU countries. EU law sets minimum harmonised rules that apply to tenders above a certain value. Notably, the contracting authorities and entities must publish their contract notice in the Official Journal of the EU (OJEU). For lower value tenders, national rules apply and so these tenders are advertised on the Scottish Government’s national portal - Public Contracts Scotland (PCS).
The government guidance published on 13th September states, that if we are to leave the EU next year with no deal in place regarding arrangement on access to OJEU, a replacement e-notification service will be made available for the UK. This will mean that contracting authorities and entities must publish their contract notice on the UK e-notification service rather than OJEU. This also means that suppliers who would like to access contract opportunities from the UK public sector will need to look at the new UK service.
It is important to note however that the requirement to publish notices in Public Contracts Scotland will remain in place. Public bodies which currently rely on PCS to send notices to the OJEU will still be able to rely on PCS to send these notices to the new UK e-notification service.
Although the UK e-notification service will come into effect from the date that the UK leaves the EU, the government will not consider any additional procedural issues with regards to switching systems until a later date.
Whilst in the event of a no-deal a UK specific portal is to be introduced, it is unlikely that much else will change with regards to procurement, at least in the short-term. EU directives are implemented via UK regulations which will continue to apply after we leave, unless they are changed by further UK legislation.
The UK is a member of the World Trade Organisation (WTO) agreement on Government procurement (“WTO – GPA”) via its membership of the EU. There is uncertainty as to whether the UK would need to reapply post Brexit and how lengthy or complex a process that may be. Assuming the UK does remain or subsequently becomes a member of WTO-GPA post Brexit, this would give UK businesses some access to the public procurement markets of EU member states and also the US, Japan and 18 other countries worldwide. Although it would not give the UK the same level of access to procurement markets that it currently enjoys as a member of the EU, it would give the UK freedom to create a new procurement policy and negotiate protections and concessions from the GPA’s obligations.
Don’t Panic!
Don’t panic. A no-deal scenario is not yet inevitable however the UK must understandably develop contingency plans. Both parties are still actively negotiating to secure agreement over a Withdrawal Treaty, which if secured and ratified in time, would provide a transition period until the end of 2020. During that period, much of EU law would apply as it does now.
Contact: Sophie Lennox, Trainee, sle@bto.co.uk T: 0141 222 2939