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Brexit latest: publishing contracts if there’s no deal

Crowds representing UK and EU flags

After a tumultuous week in Westminster, the situation surrounding the UK’s exit from the EU continues to be dynamic. Although the ‘meaningful vote’ of 15th January has now taken place, and the Government has survived a no-confidence vote,  much remains to be decided and clarified – not least before the next vote, currently scheduled for 29th January.

However, preparations are underway for various outcomes, and what their effect will be for public procurement in the UK. At BiP Solutions, we are working hard behind the scenes to ensure it continues to be ‘business as usual’ for our customers post 29th March and are pleased to share the update below.

What has the Government said about ‘no deal’?

As previously described in a technical note published in September, the Government has stated that it will ensure that the regulation for public procurement will continue to function in the “unlikely event” of a ‘no-deal’ exit. Current regulations will be adapted as necessary to remain in operation, should this situation arise. The Government reassures that most procurement regulations “will remain exactly the same.”

What might change?

If the UK leaves the EU without a withdrawal deal being agreed, the key change for public procurement will be that contracting authorities would be required to send notices to a new, UK-specific e-notification service. This would replace the need to send to the EU Publications Office and Tenders Electronic Daily. Advertising in Contracts Finder, MOD Defence Contracts Online, Public Contracts Scotland, Sell2Wales and eTendersNI would remain a requirement, as is currently the case.

As a leading e-Sender, BiP Solutions has been working closely with the Cabinet Office to develop this new service.

What will reduce the level of action needed?

As we understand the Cabinet Office’s current guidance, contracting authorities which currently use an ‘e-Sender’, a third-party provider, to submit publications to the EU Publications Office will be able to continue with this approach, regardless of the outcome of Brexit negotiations. However, this is dependent on e-Senders also completing the integration process to send notices to the new UK-specific e-notification service, should this be enacted.

Simon Burges, CEO of BiP Solutions, said:

I am delighted to say that BiP Solutions were one of the first e-Senders in the UK to confirm to the Cabinet Office that we will integrate our services with the new UK e-notification service. This is great news for our customers, since any authority working with BiP will need to take very little action to change their current method of publishing contracts, unlike other e-Senders who may be required to publish notices manually.

This year, we celebrate our 35th anniversary and whilst our operation has grown considerably in size and scope over the years, our core values remain unchanged. We will continue to remain at the heart of the buyer/supplier relationship and support our customers through all stages of their procurement journey, and that includes providing advice and guidance – deal or no deal.

Contracting authorities who work with other e-Senders or who submit their notices directly to the EU Publication Office may need to publish their notices manually to the new UK notification service. Information as to how to do this has not yet been released, meaning that these organisations will have to await further advice depending on future developments.

To find out more about how BiP Solutions can help with your contract and tendering needs, visit www.bipsolutions.com or call (+44) 0141 332 8247.

New guidance on public procurement post Brexit released

Although the government is expecting “to negotiate a successful deal with the EU”, it has released guidance on how to access public sector contracts if there is no Brexit deal.

These guidelines have been created to help British citizens and businesses understand the possible implications of a no-deal Brexit and make any required plans and preparations.

The new document outlines how this will affect access to, and publishing of, public procurement contract opportunities for UK suppliers, contracting authorities and entities and E-Senders.

What happens if there is a ‘no deal’ outcome?

The government has been planning for all post Brexit scenarios, including a potential ‘no deal’ outcome in March 2019.

In the case that the UK leaves the EU without a deal in place regarding future arrangements on access to OJEU/TED, the government has announced that “a replacement UK-specific e-notification service will be made available.”

This means that all UK contract opportunities that are currently published on OJEU/TED will be published on the new UK e-notification service which will be available from exit day. This service will be free for all users. Companies that wish to access contract notices from other EU countries will still be able to access OJEU/TED.

Testing is currently being carried out by OJEU E-Senders, which will ensure that all technical requirements are in place for a smooth transition to the new system, if required.

What will change?

The government has outlined the changes for UK both suppliers and contracting authorities and entities.

  • If there is a no deal Brexit scenario contracting authorities and entities should publish contract notices on the new UK e-notification service rather than OJEU/TED.
  • All other publication requirements for buyers would remain unchanged.
  • Suppliers that would like to find above threshold opportunities from the UK public sector should subscribe to the new UK e-notification service.

Apart from OJEU access, not much is likely to change in procurement as the Public Procurement Regulations 2015 are already in UK law.

Until March 2019

Until March 2019, the UK remains an EU member and all procurement opportunities that fall within the scope of the EU Procurement Directives will still be advertised on the Official Journal of the European Union (OJEU).

If there is a Brexit deal it is still unclear what access the UK will have to the OJEU/TED.  The government has announced that there will be more engagement on how to deal with ongoing procurement procedures in the handover period.

The full technical notice is available here.

Brexit Update: EU Agrees on Future Trade Strategy

brexit_trade_agreements_bip_solutions

There have been updates on what trade negotiations between the UK and the rest of the world will look like post Brexit.

Today, Prime Minister Theresa May has called for a “new dynamic” during the next stage of negotiations. She is optimistic that a deal can be reached which will benefit both Britain and Europe.

EU negotiators have already accepted the UK’s demand to pursue an independent trade policy while remaining inside the customs union and single market during the transition period from 30 March 2019 to the end of 2020.

Find out more below.

Independent Trade Policy

At the start of the year, the Secretary of State for International Trade said that the UK Government wants to maintain British businesses’ “guaranteed rights to access global public procurement markets worth approximately £1.3 trillion per year”.

On 15 March, it was announced that the latest draft of the transition deal leaves Britain free to sign trade deals during the Brexit transition period. The Government will not be required to seek permission from the European Union.

It appears that both sides of the Brexit divorce are now closer to agreeing on a transition package deal with Germany’s Brexit co-ordinator, Peter Ptassek, stating that negotiations were running smoothly, with a “lot of progress” being made.

World Trade Organisation

As well as the UK being able to sign trade deals during the transition period, the EU has also agreed that the UK does not need to defer to Brussels at the World Trade Organisation in Geneva. Instead, the UK can participate “in its own right”, however,, it must not contradict EU policies. This is crucial to the realisation of International Trade Secretary Liam Fox’s ambition for the UK to sign trade deals with up to 70 countries during the transition period.

Irish Border Negations

Both Westminster and the 27 EU Member States (EU27) want to find a solution that will keep Northern Ireland’s border with the Republic open without border checkpoints as it is at present. This is challenging, given that, post Brexit, the Irish border will be the land boundary between the UK and the EU.

The EU27 made it clear that reaching a deal on the Irish border was crucial to all future agreements with the UK including the vision of the “wide-ranging and ambitious” free trade deal envisaged in the seven-page blueprint for a future deal between the EU and UK endorsed by EU27 leaders at today’s summit in Brussels.

It was expected that the EU27 would approve a draft deal on Britain’s transition to Brexit, opening the door for talks on trade. This morning, President of the European Council, Donald Tusk, announced a Brexit deal was done.

Theresa May told the EU27 leaders: “We have the chance now to create a new dynamic in the talks, to work together to explore workable solutions on Northern Ireland, on our future security co-operation and in order to ensure the future prosperity of all our people.”

Keep following the BiP Solutions blog for news, analysis and commentary on public procurement and Brexit.

One year on: How will UK public procurement work after Brexit?

public procurement after brexit

This Friday, 23 June, will mark the one year anniversary of Britain voting to leave the EU, and there is still relatively little clarity about trade deals which will have an impact on public procurement.

However, four potential models for a procurement relationship for British companies to participate in the EU market after Brexit have been outlined in a paper published by the European Parliament, titled Consequences of Brexit in the Area of Public Procurement.

The report said the four models relevant to any discussion of EU/UK public procurement post Brexit were:

1. The European Economic Area (EEA) Agreement model, which represents current EU procurement law.

2. The WTO Agreement on Government Procurement (GPA), whose rules are much looser than EU law.

3. EEA-minus, which uses the EEA Agreement but without all its elements.

4. GPA-plus, which adds to GPA provisions. GPA-plus is the approach currently being pursued in negotiations with the US in the Transatlantic Trade and Investment Partnership (TTIP).

But how likely is each of these to be used, and how would the various models work? Let’s take a closer look at each of them.

EEA

This model is based on the European Economic Area (EEA) agreement, which is currently used by European Free Trade Association (EFTA) states such as Norway and Switzerland.

This agreement would involve Britain being a member of the EEA, without actually being part of the EU. In principle, this model would give Britain access to the single market – in exchange for a financial contribution – without the additional burden of being a full EU member. It’s worth noting that if Britain were to opt for this model after Brexit, they would first have to join the EFTA.

Under the EEA agreement model, the rules would follow those used within the EU, including a requirement to use the EU’s common advertising system for notices – Tenders Electronic Daily (TED) –and to submit notices in one of the EU’s official languages.

However, the EEA model requires accepting the core principles of the EU’s internal market, including free movement of people, which could be a sticking point. Politically, it may be hard to convince pro-Brexit ministers, MPs and voters that continuing to make payments to the EU (albeit not into the main budget), accepting free movement of people and becoming a law taker rather than a law maker is compatible with last year’s vote to leave the EU.

GPA

This model would see the EU-UK relationship on public procurement being governed solely by the rules of the World Trade Organisation Agreement on Government Procurement (GPA).

The GPA model has been used in the EU itself in public procurement agreements with its trading partners who are not parties to the GPA, and it could be a viable option for an EU-UK agreement on procurement.

The UK is currently party to the GPA through its EU membership, but there is no precedent for the current situation. With this in mind, there is some uncertainty as to whether the UK would have to rejoin the GPA after Brexit and this would be the first question that would have to be answered if the UK opted for this model.

One view is that the UK will in fact have to rejoin by following the same process as any new party to the agreement. The other perspective is that the UK can maintain its current rights and obligations under the GPA without having to make a new application to join.

The GPA model could, at the very least, serve as a short-term solution pending a final agreement. However, much will depend on the views of the current GPA Parties and the degree of consensus between them.

EEA-minus

Another possible approach outlined by the report is an ‘EEA-minus’ approach, which would use EU law as the basis for procurement-specific rules and would maintain EU access to above-threshold UK markets on the same basis as at present.

This model is similar to that used in the Deep and Comprehensive Free Trade Area agreements (DCFTAs) between the EU and some neighbouring countries like Georgia, Ukraine and Moldova.

This would work as an EU-UK agreement in procurement even if the UK does not remain fully part of the Single Market, and would mean that the UK would be permitted to continue using the common EU advertising system, TED. However, this model would offer the UK no more flexibility than it currently has and with no say over how rules develop in the future.

GPA-plus

Another option the paper identified is a ‘GPA-plus model’ that would use the WTO Agreement on Government Procurement as a basis, supplemented with additional rules and commitments which could be used to address issues that are not covered by the GPA, including rules based on EU law.

This type of agreement is in place with Chile, Colombia, Peru and Ecuador, and has been pursued in the EU-US trade negotiations. It would give the UK the freedom to pursue its own procurement policy within the limits of the GPA rules.

These are four options which are viable for UK public procurement after Brexit. Regardless of which approach is taken, whether it is one of these four or something completely different, the devil will be in the detail.

With the European Commission estimating that public expenditure on goods, works and services makes up 13.1% of EU GDP and 13.6% of UK GDP, it’s clear that both the UK and EU will be keen to make sure that markets stay open and accessible to each other after the UK’s withdrawal from the EU.

Keep following the BiP Solutions blog for news, analysis and commentary on public procurement and Brexit.