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EU public procurement law aims to create a level playing field
across the EU for economic operators competing to win public
contracts. As we near the end of the Brexit transition period, what
should economic operators on the island of Ireland know?
Is UK public procurement law set to change?
Yes. The
Public Procurement (Amendment etc.) (EU Exit) Regulations 2020
are due to come into force at 11.00 pm on 31 December 2020.
Although the UK public procurement regime will largely remain
the same in January 2021, there will be some notable changes. The
changes convert the UK public procurement system to a standalone
system outside of the EU. They also begin the process of swapping
the basis of EU economic operators’ rights (when accessing UK
procurements) from EU law to the WTO General
Procurement Agreement (“GPA”).
The new Regulations will amend the UK’s Public Contracts
Regulations 2015, the Concession Contracts Regulations 2016 and the
Utilities Contracts Regulations 2016. They will also amend
‘retained direct EU legislation’ (i.e. the EU
regulations and decisions as at 29 March 2019 that were brought
into UK law under the European Union (Withdrawal) Act 2018). They
also address certain EU/EEA Treaty rights, described further
below.
Do the new UK Regulations extend to Northern
Ireland?
Yes. (Separate legislation has been laid in Scotland.)
From January 2021 onwards, how will I find out about new
opportunities in the UK?
Whether or not you are an economic operator based in the UK, you
will now need to monitor a new portal to be aware of opportunities
in the UK.
UK awarding authorities will no longer be obliged to use the
Official Journal of the European Union / Tenders Electronic Daily
(OJEU/TED) to advertise procurement opportunities and contract
awards.
Instead, the UK is introducing a new e-notification system, Find a
Tender, on which UK awarding authorities will be
required to publish procurement notices. It goes live at 11.00 pm
on 31 December 2020. The Cabinet Office has published
guidance on how the new process for publishing notices will
operate. Local platforms will continue to operate but notices must
first go to Find a Tender. The guidance states
that “legal and policy requirements to advertise on other
platforms such as … eSourcing NI and eTenders NI will not be
affected by these changes”.
A range of other technical amendments de-link the UK from the EU
system. For example, European Single Procurement Documents become
Single Procurement Documents and contracting authorities no longer
have recourse to e-Certis.
I work for a company incorporated in Ireland. Can I
still take part in UK competitions?
Yes, but your rights will be based on UK domestic legislation
and will now derive from a different legal framework: the WTO GPA,
rather than the EU. The intention stated in the Explanatory
Memorandum to the new UK Regulations is to treat non-UK economic
operators on a level playing, whether they are from the EU or not.
These are some of the main changes (using the UK Public Contracts
Regulations 2015 as the example):
- The prohibition against discrimination on grounds of
nationality under the Treaty on the Functioning of the EU and EEA
Agreement will cease to be recognised in UK law. - Part 2 of the Public Contracts Regulations 2015 governs the
conduct of procurements. The obligation on a contracting authority
(under Regulation 89) to comply with Part 2 and retained EU
obligations in respect of contracts falling within Part 2 is no
longer owed to economic operators in EEA States but rather to
economic operators in the UK and Gibraltar. - Regulations 25 and 90 of the Public Contract Regulations 2015
are amended to preserve the UK’s obligations to GPA States
(to include EU Member States), as if the UK is party to the GPA on
the basis of the EU schedules. However, after 12 months, these two
regulations will be removed. The stated intention is for the UK to
accede to the GPA and then, though separate legislation, give UK
Ministers and devolved authorities powers to implement the
obligations of the GPA (and other international agreements). - Where a tender is abnormally low because the tenderer has
obtained State aid, UK contracting authorities currently may reject
the tender on that ground alone, only if the tenderer is unable to
prove that the aid was compatible with the EU internal market. This
provision is removed.
I work for a company in Northern Ireland wishing to
tender for a contract being awarded in the Republic of Ireland. Can
I still take part?
Again, yes, but your rights and protections will not be derived
from your status as an economic operator in an EU Member State, but
rather a GPA State (once the UK’s accession process has
completed, and subject to any trade agreement reached by the EU and
UK).
Contracting authorities in the Republic of Ireland are bound to
treat GPA States no less favourably than EU States, in so far as is
covered by the EU schedules to the GPA and any other international
agreements by which the EU is bound (see, for example, Regulation
25 of the
European Union (Award of Public Authority Contracts) Regulations
2016).
For companies incorporated in either jurisdiction on the island
of Ireland, it is likely that queries will arise when participating
in competitions in the other jurisdiction, for example in relation
to procurements that fall below GPA thresholds.
The WTO
GPA is designed to open procurement markets among its
signatories by keeping competitions open, fair and transparent. It
consists of a main agreement and schedules for each signatory. The
extent to which the GPA applies depends on what is specified in the
relevant State’s schedule. Each schedule contains several
annexes which set out procuring entities; goods; services;
construction services; threshold values; and exceptions to
coverage. You can access the EU’s schedules
from this page. The process by which the UK is acceding to the
GPA is nearly complete.
Enforcement of GPA obligations is carried out through two
mechanisms. First, the GPA requires signatories to establish
domestic review systems to enable bidders to challenge breaches of
the GPA and/or the national legislation giving effect to it.
Secondly, there is a WTO dispute settlement mechanism at
international level. Any GPA State can initiate proceedings against
another in circumstances where it believes the other has breached
its GPA obligations.
Will UK awarding authorities continue to use the
existing procurement procedures?
Yes, much of the UK public procurement framework will not
substantially change. Procedures (such as the open, restricted, and
competitive dialogue procedures) will still be used unless they are
changed by further UK legislation.
Do the contract value thresholds above which the UK
procurement regulations apply remain the same?
The monetary thresholds above which the statutory procurement
regime applies is the same for now, but converted into sterling and
set out in the main regulations. However, the UK Cabinet Office
will now be responsible for reviewing thresholds to verify that
they correspond with GPA thresholds. The first review will relate
to the 24 month period ending 31 August 2021, with a view to any
changes coming into force in January 2022.
I am already involved in a procurement process being
conducted by a UK awarding authority. Will it be impacted by the
new legislation?
No. The regime existing in 2020 continues to apply to
procurements commenced before 11.00 pm on 31 December 2020. If you
have been appointed under a framework agreement, call-off
competitions are to be conducted in line with existing 2020 law.
Transitional arrangements are set out in the
schedule to the new Regulations.
I work for a Northern Ireland contracting authority and
have started a procurement procedure before 31 December 2020. Do I
have the option of switching to the new UK regime?
No, procurements that were commenced before 11.00 pm on 31
December 2020 must be conducted in accordance with the rules
applying before that time. A procurement commenced on the OJEU/TED
must be concluded on OJEU/TED. The UK guidance recommends that, for
ease of use, notices which are required to be sent to OJEU/TED for
publication should also be sent to the new Find a
Tender System.
What are the next steps?
Inevitably, questions will arise as contracting authorities and
economic operators get used to new systems in Northern Ireland, and
as questions about engagement of GPA rights arise. For the moment,
it seems that the most prudent course of action for contracting
authorities on both sides of the border is to stick closely to the
fundamental principles that govern procurement law (objectivity,
transparency, fairness & proportionality, equality of
treatment) as these likely underpin any standard of good
procurement practice enshrined in international or domestic
law.
This article contains a general summary of developments and
is not a complete or definitive statement of the law. Specific
legal advice should be obtained where appropriate.
