On 14 January 2019, the UK government updated its guidance in relation to public-sector procurement in the event of a no-deal Brexit. The guidance confirms that, if the UK leaves the EU without a deal, the public procurement regulations will remain broadly unchanged after EU exit at 11pm on 29 March 2019. The guidance also sets out important information about publishing – and accessing – contract opportunities.
UK procurement rules will remain broadly unchanged
The current UK procurement rules are largely derived from EU directives. The guidance confirms that in the event of a no-deal Brexit, these rules will remain broadly unchanged after the UK exits the EU on 29 March 2019. The government has also published a draft Statutory Instrument amending the current rules to ensure that they will continue to apply if the UK leaves the EU without a deal.
What will change for contracting authorities?
In a no-deal scenario, contracting authorities may no longer have access to the EU Publications Office and Tenders Electronic Daily (TED). The government has therefore confirmed that it will amend current legislation to require UK contracting authorities to publish public procurement notices to a new UK e-notification service. The guidance states that new UK e-notification service will be ready for use by exit day.
For procurements that have commenced before 11pm on 29 March 2019, (i.e. they have been advertised in the OJEU already), contracting authorities will need to comply with the new regulations from that point, for example by posting subsequent contract award notices on the new UK eNotification service instead of OJEU/TED. However, the guidance also states that “the effect of the former rules will be preserved in some circumstances to maintain fairness throughout the procurement.” The guidance promises further detailed technical guidance to cover the transitional period, and suggests this will be ready early in 2019 once the draft statutory instrument referred to above has been finalised.
Contracting authorities who currently submit their notices direct to OJEU/TED will need to register with the UK e-notification service. Contracting authorities who work with a third party provider (an ‘e-Sender’) to publish their notices can continue to do so, provided that the e-Sender has successfully integrated their services into the new UK e-notification service. The guidance contains a list of e-senders who have confirmed that they will integrate their systems. In the interim, contracting authorities may wish to contact their e-Senders to ask about their integration plans.
The requirement to advertise on domestic portals, such as Contracts Finder, MOD Defence Contracts Online, Public Contracts Scotland, Sell2Wales and eTendersNI will remain unchanged.
What will change for suppliers?
In the event of a no-deal, suppliers wishing to access UK contract opportunities from the UK public-sector from 11pm on 29 March 2019 will need to use the new UK e-notification service. The rules for suppliers using the domestic portals remain unchanged. Suppliers who wish to access contract opportunities from the EU can also continue to do so via OJEU/TED. However, guidance published by the EU earlier this month sets out that, the event of a no-deal Brexit, suppliers from the UK will have the same status as all other suppliers based in a third country with which the EU does not have any agreement providing for the opening of the EU procurement market . This has a number of consequences for suppliers, including:
- Under the Utilities Directive 2014/25/EU, tenders may be rejected if the proportion of the products originating in third countries with which the EU has not concluded an agreement ensuring comparable and effective access for EU undertakings to the markets of those third countries, exceeds 50% of the total value of the products constituting the tender. Even where such offers are not rejected, they will not lead to the award of a contract if there are equivalent offers with less than 50% of the products originating in third countries.
- UK suppliers may be prevented from bidding for defence and security contracts in the EU, as Member States retain the power to decide whether suppliers from third countries can participate in their defence and security procurement procedures.
- In addition, EU Member States will no longer be under the obligation to recognise security clearances obtained by suppliers in the UK, even where they could consider them as equivalent to their national security clearances. This may lead to the exclusion of suppliers relying on a UK security clearance in EU defence and security public procurement procedures.