Introduction
On 14th October, the Government laid before Parliament further draft legislation to ensure the UK public procurement regime is ready for Brexit after the end of the Implementation Period on 31st December 2020 at 11pm.
This comprised the draft Public Procurement (Amendment etc) (EU Exit) Regulations 2020 (“the New Regulations “) which is to revoke the Public Procurement (Amendment etc.) (EU Exit) Regulations 2019 (2019/560) (the 2019 EU Exit Regulations) and the Public Procurement (Amendment etc.) (EU Exit) (No. 2) Regulations 2019 (2019/623) before they come into force.
Similar provisions were also brought forward to amend the Defence and Security Public Contracts (Amendment) (EU Exit) Regulations 2019 (SI 2019/697) and the Defence and Security Public Contracts Regulations 2011 (SI 2011/1848).
The complexity and sheer mass of legislative provisions designed to ensure that the UK has a workable procurement regime at the end of the Implementation Period (“IP”) is enough to bamboozle even those familiar with the public procurement rules. Nevertheless, despite this level of detail the idea behind the New Regulations is that, apart from a few key amendments, the rules themselves will basically stay the same thereby ensuring continuity and stability in UK public procurement next year. In this article we look at the main effects of the New Regulations.
Background
As readers will know the EU legal framework for the regulation of public procurement by public authorities and utilities consists of a package of directives (“the EU Procurement Directives”) which govern procedures for the award of public contracts over certain specified financial thresholds to suppliers of works, goods and services. They are aimed at ensuring that the EU public procurement market is open and competitive and that suppliers are treated equally and fairly.
The EU Procurement Directives have been implemented in England, Wales and Northern Ireland by the Public Contracts Regulations 2015 (“PCRs”), the Utilities Contracts Regulations 2016 (“UCRs”) and the Concession Contracts Regulations 2016 (“CCRs”) (together “the Regulations”). There are separate regulations for Scotland.
Under the provisions of the European Union (Withdrawal) Act 2018 (“2018 Act “) the European Communities Act 1972 was repealed. Section 1 B (2) of the 2018 Act states that “EU derived domestic legislation, as it has effect in domestic law immediately before exit day, continues to have effect in domestic law on and after exit day”.
The effect of this provision is that it effectively preserves a set of UK procurement laws in the immediate aftermath of the UK’s exit from the EU.
The 2018 Act had not provided for a delay to the Exit Day and the introduction of an Implementation Period (“IP”). However, with the passage of The European Union (Withdrawal Agreement) Act 2020 and agreement and ratification at EU level of the EU-UK Withdrawal Agreement Exit Day was set as midnight on 31st January 2020 and an IP was added until 11pm on 31st December 2020. This was to allow the UK and the EU to negotiate a trade agreement designed to be the basis of their future trading relationship. During the IP UK remains in the EU’s single market and customs union but is no longer a part of the decision-making bodies as of Exit Day. We are currently in this period now.
The Act also provided for a “mass deferral” of the Statutory Instruments that had previously been passed in anticipation of an immediate Brexit on 31st January 2020. The effect of this legislation among other things was that the Public Procurement (Amendment etc.) (EU Exit) Regulations 2019 and Public Procurement (Amendment etc. (EU Exit) (No.2) Regulations 2019 (together “the Amended Procurement Regulations” ) which were due to come into force on ‘Exit Day’ (31st January) would now come into effect on 31st December 2020 at 11pm. The amended Procurement Regulations, passed by Parliament in March 2019, amend a number of key procurement statutes including the PCRs, the CCRs and the UCRs.
On 14th October, the New Regulations were laid before Parliament. These regulations are in draft form and are subject to debate before Parliament They have the effect of repealing the Amended Procurement Regulations before they come into force as they were made prior the entry into force of the Withdrawal Agreement and the EEA EFTA Separation Agreement. They needed to take into account obligations in those legal texts and subsequent developments.
Although they leave the provisions of the PCRs, CCRs and UCRs largely untouched they do set out a number of amendments to these regulations which will take effect at the end of the IP.
What do the New Regulations Do?
The draft New Regulations implement the UK’s obligations in respect of public procurement procedures under Withdrawal Agreement and the EEA EFTA Separation Agreement. They also fix deficiencies in EU Retained Law under the power provided for in Section 8 of the 2018 Act. These are deficiencies which arise as a result of the withdrawal of the UK from the EU. It amends or removes provisions that are inoperable, inappropriate or would otherwise prevent the legislation from functioning effectively after Exit Day. The Government Briefing paper which accompanies the draft Statutory Instrument sets out a few key examples such as provisions that relate to the publication of notices in the Official Journal of the EU (OJEU) or submission of reports to the European Commission (the Commission. These would be no longer appropriate because they impose requirements and confer functions in respect of EU entities that no longer have such functions in relation to the UK after Exit. These have been removed or replaced with provisions that relate to the functions of ‘domestic’ bodies.
Although the New Regulations contain many complex provisions relating to the UK’s international obligations of particular interest to those who deal with the public procurement rules day to day are as follows:
(i) UK e-Notification Service: The New Regulations replace the requirement to send notices to the EU Publications Office (for publication in OJEU via Tenders Electronic Daily (TED)), with a requirement to submit notices to a new UK e-notification service. Publication will take place electronically and the service will be free for all users. Notices must not be published on Contracts Finder, Sell2Wales or e-TendersNI before they are published on the UK e-notification service.
(ii) Pipeline Procurements: Projects advertised but not yet awarded before the expiry of the IP continue to be bound by the present procurement rules subject to the detailed schedule set out in the New Regulations.
(iii) Abolition of Directly Effective Rights: Article 18 of the Treaty of the Functioning of the European Union (“TFEU”) prohibits any discrimination on grounds of nationality within the scope of the application of EU Treaties. It applies where a national of one Member State suffers discriminatory treatment in relation to nationals of another Member State solely on the basis of nationality in connection with a right in the TFEU or another EU Treaty. The UK Government’s intention is to treat all non-UK economic operators equally. Therefore, to achieve this the New Regulation disapply the rights derived from Article 18 of TFEU and parallel provisions in Article 4 of the EEA Agreement and Article 9 of the Ankara Agreement in the field of public procurement relating to Turkey.
(iv) Transfer of Functions: The EU Procurement Directives provide the Commission with a number of functions to fulfil its supervisory role over EU public procurement that are reflected in retained EU law. That will not be appropriate after the end of the IP. The New Regulations transfer the Commission’s function to the Minister for the Cabinet Office. These powers include the ability to revalue the main financial thresholds every two years and to update the regulations to take into account technological changes in relation to electronic tendering as well as updating the effect of international agreements.
What Does This Mean for Public Procurements?
First of all, during the IP (which is current and expires on 31st December 2020) public procurements continue to be bound by the same procurement rules as set out in the EU Directives and the Regulations.
From 1st January 2021, the public procurement rules will be amended as we have described above. There are certain key procedural differences such as advertising and the publication of award notices and the transfer of functions to the Cabinet Office from the Commission. However otherwise the existing public procurement regime remain largely the same.
There are special provisions for pipeline procurements. For any procurement started prior to and not yet completed by 31st December 2020, or for any call-offs under framework agreements where the procurement commenced prior to 31st December 2020, the present procurement regime applies up to the award of the contract.
