Procurement in a nutshell – the law post-Brexit

This note seeks to give contracting authorities a sense of how their procurement practices might be affected according to some of the possible forecasts of the landscape of procurement law.

Elimination of all existing procurement regimes

Although based on EU Directives, the Public Procurement Regulations are national laws which would need to each be actively repealed by parliament in order to lose their effect.

The repeal of all UK procurement regulation with no replacement by some other regime is generally considered not to be a sustainable position.

It has been said that the increase in procurement challenges is itself an indication of the need for procurement regulation. Indeed, the Government has warned that the boycott of tenders from suppliers based in other countries can “damage integration and community cohesion within the United Kingdom, hinder Britain’s export trade, and harm foreign relations to the detriment of Britain’s economic and international security”.

No ties with the EU

It might be that, in terms of procurement policy, the UK breaks free completely from the EU and achieves access to the EU market by agreements within the framework of the World Trade Organisation, such as the Government Procurement Agreement (GPA).

Through its membership of the EU, the UK is currently party to the GPA. Its departure from the EU will mean that it will need to join in its own right.

This would mean signing up to rules similar to the current EU rules. Potentially, in this scenario, there might be less change to procurement practice as perhaps anticipated.

Free trade agreements negotiated between the UK and the EU

One option is for the UK to enter into an overarching trade agreement with the EU or enter into a number of sectoral trade agreements. By way of example, a Comprehensive Economic and Trade Agreement has recently been negotiated between the EU and Canada.

Generally, a feature of such agreements is procurement arrangements similar to the EU set-up. Effectively, contracting authorities would be in a position significantly the same as their current position.

The UK becomes a signatory to the European Free Trade Association (EFTA) and the European Economic Area (EEA)

EFTA is an intergovernmental organisation promoting free trade and economic integration between its members (Iceland, Liechtenstein, Norway and Switzerland).

The EEA enables the EFTA states (excluding Switzerland) to participate in the Internal Market. The quid pro quo is that these non-EU Member States are still party to all the relevant EU procurement legislation.

The UK’s accession to the EEA would almost inevitable involve implementation of the EU procurement rules. In this event, there would be little change to the current system.

Why is this important?

The only certainty post-Brexit is uncertainty. While we can postulate that a future framework may well be similar to what is currently in place, there is no way of knowing what the future will hold for procurement policy.

It cannot be said how high procurement will be on the policy makers’ agenda. However it can be said that the current EU procurement law will exist in the UK, in its current form, at least until the UK’s formal exit. Contracting authorities and suppliers alike do not face an immediate change to their procurement practices.

One guarantee we can provide is that this series will update you with any future developments that are set to change the face of the UK procurement landscape.

How can I find out more?

If you have any queries on the issues raised or on any aspect of procurement, please contact us via our procurement hotline on 0191 204 4464.