7 March 2019
What does a “deal” or “no deal” mean for you?
On 14th January 2019, the Government published a guidance note providing information on public procurement procedures in the event of a “no deal” Brexit. The following day, the House of Commons voted against the Government’s proposed agreement for the withdrawal of the UK from the European Union.
The risk to the transitional arrangements of an exit from the EU without an agreement in place means that organisations and business, including public authorities, utilities and their private sector partners, are necessarily focusing their attention on how to prepare for a “no deal” Brexit.
What is the legal position on public procurement after a ‘no deal’ Brexit?
In December 2018, the Public Procurement (Amendment etc.) (EU Exit) Regulations 2019 were laid in draft. At the time of writing, they had not been approved by Parliament, so are still only draft. Somewhat confusingly, further draft regulations have been laid, which would amend the draft regulations. The new draft regulations are the Public Procurement (Amendment etc.) (EU Exit) (No. 2) Regulations 2019. References in this article to the “Public Procurement Amendment Regulations 2019” are references to the first draft statutory instrument, as amended by the second. Together, they amend a number of statutes, most notably the Public Contracts Regulations 2015, Utilities Contracts Regulations 2016 and the Concession Contracts Regulations 2016.
The Public Procurement Amendment Regulations 2019 are in draft form and intended for the most part to take effect on ‘exit day’ (29th March 2019) in the event of ‘no deal’. There is always the possibility that yet more draft amending regulations could be brought forward before then, but in this note we’ll assume that doesn’t happen.
Despite affecting a number of existing statutes, and giving effect to certain EU regulations in domestic UK law, the Public Procurement Amendment Regulations 2019 will leave the UK public procurement regime largely unchanged. The proposed changes are aimed at allowing the current procurement regime to continue to work largely unchanged in a ‘no deal’ scenario.
Notable issues arising from the Public Procurement Amendment Regulations 2019 from exit day
o the UK and Gibraltar;
o GPA states, if they have agreements with the EU immediately before exit day confirming that the GPA would apply to a contract of the relevant description;
o EU member states, if the EU had agreed with a GPA state immediately before exit day confirming that the GPA would apply to a contract of the relevant description.
o any country which immediately before exit day had entered into an international agreement (other than the GPA) by which the EU was bound to treat economic operators from such country participating in public procurements, no less favourably than those from the EU
Under the Public Procurement Amendment Regulations 2019, 18 months after exit day, only economic operators from the UK and Gibraltar would continue to be entitled to remedies available under the UK public procurement regime. The UK Government announcement on 27 February 2019 that the WTO has approved its independent membership of the GPA in the event of a ‘no-deal’ Brexit, suggests that further changes to the amendment regulations may be in the pipeline.
How can you prepare?
What about a procurement which started before but continues beyond 29th March?
The bottom line
If the UK exits the EU on 29th March with no “deal” in place, it is anticipated that contracting authorities and utilities will need to comply with the Public Procurement Amendment Regulations 2019 from 29th March. As above, the key practical change is that you need to gear up to comply with the new notification requirements when these are published.
Procurement regime if a deal is agreed
If a deal is agreed, the existing UK procurement rules will be preserved under the terms of the deal, if it’s in the same form as the one rejected by Parliament in January. This would mean that the current public procurement regulations will remain broadly unchanged until 31 December 2020 when the implementation period is due to expire, and any procurement procedures which commenced before that date will remain subject to the existing regulatory regime up to award. 
For advice and assistance on procurement and contracting compliance in light of the withdrawal of the UK from the EU, please contact one of our team whose details are listed below.
This article is for general awareness only and does not constitute legal or professional advice. The law may have changed since this page was first published.
© Copyright 2019 Sharpe Pritchard