Will a “no-deal Brexit” change the position for public procurement law?
As discussed in our previous newsflash (December 2018), the public procurement position post-Brexit is expected, at least initially, to be largely the same as now, whatever the outcome of current debates. The Public Procurement (Amendment) Regulations 2019 (“Amendment Regulations”) have now passed through both Houses. The Amendment Regulations were affirmed on 20 February 2019 and, once signed by the Minister for the Cabinet Office, will come into force on “exit day”.
The Amendment Regulations make no reference to whether there is a ‘deal’ or not; they simply come into force on “exit day” which is defined in the European Union (Withdrawal) Act 2018 (“Withdrawal Agreement”) as 11:00pm on 29 March 2019. The exception to this will be Regulations 6, 8 and 10, which come into force 8 months later. “Exit day” can be amended by a Minister of the Crown but this must be done by way of regulations passed by both Houses. Although a parliamentary vote on 19th January 2019 rejected a proposal by MP Yvette Cooper to delay Brexit, there is still speculation that “exit day” may change.
If the current Withdrawal Agreement is agreed and implemented, we will continue to be a member of the World Trade Organisation (“WTO”) Agreement on Government Procurement (“GPA”) during the “Implementation Period” (currently planned from “exit day” to 31 December 2020). It is likely that any other ‘deal’ would include the same, or similar, provisions.
In the event of a ‘no deal’ Brexit, the GPA will cease to apply to the UK post withdrawal from the EU. The Government is therefore arranging our accession to the GPA as an independent party. Accession to the GPA will require a 29 day waiting period, during which the GPA will not apply to the UK. The clock for the waiting period will run from the date on which the UK deposits an instrument of accession to the WTO Director-General. During any period that the GPA does not apply, UK suppliers will not have guaranteed access to government procurements or associated remedies in GPA member states. The position for contracting authorities in the UK, however, is not planned to change if there is ‘no deal’.
The post-Brexit position for public procurement law is that, whether there is a ‘deal’ or not, public procurement law will remain the same until “exit day” (even if this is pushed back) and will then change thereafter. The legal position after “exit day” will then remain largely the same, as detailed in our previous newsflash (December 2018).
It should be noted that the Public Procurement (Amendment etc.) (EU Exit) (No. 2) Regulations 2019 (“Amendment (No.2) Regulations”) are currently making their way through the parliamentary process. Most notably, the Amendment (No. 2) Regulations ensure that the rights of economic operators from EU Member States, GPA States and States who are party to other binding international agreements (immediately prior to “exit day”) under the Public Contracts Regulations 2015 will continue to apply for 18 months after “exit day”, rather than the 8 months allowed under the initial Amendment Regulations for GPA states, or the immediate removal of such rights for States who are party to other binding international agreements.
In effect, the Amendment No. 2 Regulations, if affirmed, will therefore result in the current procurement law position remaining as is for non-UK organisations for 18 months following “exit day”. We are monitoring the progress of the Amendment (No. 2) Regulations and await confirmation as to whether they are affirmed.
If you have any queries on the impact of Brexit on procurement practice, please contact one of our specialist team.