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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.

Scottish Budget 2018

Against the backdrop of uncertainty caused by the UK’s impending exit from the European Union, Finance Secretary Derek Mackay MSP has delivered the 2018 Scottish Budget (December 12th).

Describing it as a “fair and progressive budget” Derek Mackay presented a business-friendly package, while placing the protection of public services at the heart of this Budget Statement.

Below you can find a breakdown of key Scottish Budget 2018 figures in addition to which public sector opportunities await your industry.

SME

A £50 million ‘Town Centre Fund’ will provide much needed support for Scotland’s high streets. There will also be a cap put on business rates below inflation, providing a tax cut for small businesses, which Mackay described as “the most generous system anywhere in the UK”. The partnership between the private sector and the Scottish Government has played an important role in recent years, which was championed by the Cabinet Minister for Business, Fair Work and Skills Jamie Hepburn MSP at Procurex Scotland, in which he encouraged businesses to consider the welfare of local communities and the environment, calling on suppliers to “not be risk averse”.

Housing

An investment of £825 million -as part of an overall fund of £3 billion- will help deliver 50,000 affordable homes over the course of this parliament, which has been the cornerstone of Housing Minister Kevin Stewart’s construction agenda.

Education

Describing education as the Scottish Government’s “defining mission”, the Finance Secretary set out bold new proposals for Scottish schools. £180m will be used to close the attainment gap, including £120m, which will be directed towards headteacher budgets through ‘Pupil Equity Funding’. £600m will also be given to colleges and £1 billion has been secured for Scotland’s world-class universities. £214m has been set aside for apprenticeships and skills; providing a gateway in to employment for many of Scotland’s young people.

Healthcare

An increase of £730m will be provided to NHS Scotland, which is the equivalent to hiring 19,000 nurses, as Derek Mackay confirmed “health is a top priority for the government”, which accounts for almost half of the Scottish Government’s overall spending.

Local Government

The Scottish Government will provide “a real terms increase in the total local government settlement of over £210m” Mackay said, taking the local government budget to £11.1 billion. This will be welcome news for Fife Council executive director Keith Winter, who was a keynote speaker at Procurex Scotland, where he championed “social justice” as he encouraged councillors to adopt a global strategy moving forward.

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.

Key takeaways from 2017’s General Election

2017 general election takeaways

Prime Minister Theresa May called a snap election for 8 June to increase her majority and strengthen her hand in Europe, but she ended up without any majority at all.

The shock result of the 2017 General Election, which saw the Conservative Party returned as a minority administration, raises more questions than answers about where the country goes from here as Brexit negotiations loom.

Here are three key takeaways from the 2017 General Election:

What happens next?

The Conservatives won the most seats, but failed to win outright. To win outright, a party must secure 326 out of 650 seats in Parliament – the Conservatives ended up with 318, just short of an overall majority. However, May will still try to form a government by entering into an agreement with the Democratic Unionist Party whose 10 seats will bring the two parties’ combined total to 328.

But how will this agreement work in practice? With policy disagreements on a number of issues from Brexit and border controls to scrapping the ‘triple lock’ rise in the state pension and means-testing winter fuel payments, it remains to be seen.

IndyRef 2 off the table?

The SNP lost 21 seats across Scotland, with high-profile casualties including Alex Salmond and Angus Robertson, putting plans for a second vote on Scottish independence in serious jeopardy.

After making sensational gains in 2015’s General Election, when Nicola Sturgeon’s party won 56 out of Scotland’s 59 seats, the SNP saw its numbers fall to 35 MPs. As the SNP ceded ground, the Conservatives produced their best result in Scotland since 1983, returning 13 MPs.

While the SNP still has a clear majority of seats in Scotland, losing so much ground could undermine the Nats’ push for a second independence vote in the immediate future.

Ramifications for Brexit

This election was supposed to deliver a national vote of confidence in Theresa May, which would give the PM a mandate to seek a ‘hard Brexit’ ahead of the forthcoming negotiations.

However, entering into an agreement with the DUP is likely to scupper those plans. As Polly Toynbee of the Guardian points out, the “DUP top priority will be soft border, saving Good Friday agreement and free movement across boundary. That absolutely rules out hard Brexit.”

Previous statements from the DUP also point to this being the case. Arlene Foster, the DUP leader, has spoken against a hard Brexit in the past, saying: “No-one wants to see a hard Brexit, what we want to see is a workable plan to leave the European Union, and that’s what the national vote was about.”

Formal Brexit negotiations are scheduled to begin on 19 June. With May’s mandate for a ‘hard Brexit’ seemingly now off the table, it remains to be seen how the UK will secure the best post-Brexit trade deals and policies amid such political uncertainty at home.

Brexit: A Buyer Perspective

Brexit Buyer Perspective

The possibilities for post-Brexit public sector procurement are endless: for instance, it could reduce the legislative burden on suppliers or allow UK buyers to favour national goods/services.

While there is real potential for positive change, nothing will be known for sure until Brexit negotiations are completed. However, if you are working within the UK marketplace it is natural to want to prepare for the future.

So instead of listening to the naysayers, why not listen to public sector buyers who have sound knowledge of the subject?

Brexit: A Buyer Perspective hears from UK public sector buyers, revealing their forecasts for post-Brexit procurement reform, as well as opinions on how changes could be capitalised upon.

Written in layman’s terms, A Buyer Perspective shows the survey results from a cross-section of UK procurement officials, with detailed analysis of the results.

The report examines public sector buyer opinion across a range of topics including Brexit’s impact on future procurement activities, thresholds and procedures, along with the possibility of favouring bids from UK suppliers.

Free to download as a PDF, Brexit: A Buyer Perspective can be consumed on the go or easily printed.

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Public Procurement after Brexit: BiP Business Analysis

Brexit Procurement

It’s Business As Usual for Public Sector Procurement

Many of our public and private sector clients have been asking how the EU referendum vote will impact public sector procurement. The short answer is “not a lot”. The slightly longer answer is contained in BiP Solutions’ latest business analysis – Public Procurement After Brexit.

BiP’s Principal Consultant Eddie Regan spends most of his waking hours either immersed in procurement regulations or running training workshops on how they impact buyers and suppliers.

Eddie has helped BiP clients understand countless regulatory changes over the years and in this Business Analysis, he gives us his expert opinion on the potential impact of Brexit.

How important is the public sector market?

In the financial year 2014/15, the public sector spent approximately £263 billion on goods, works and services, making it the largest marketplace for UK suppliers. It helps drive the UK economy, providing revenue and jobs for thousands of businesses.
The market is open to suppliers of all sizes, as Treasury figures from 2014/15 showed 27.1% of central government buying was with small businesses, either directly (10.9%) or through the supply chain (16.2%).

The Report

Written in layman’s terms, Public Procurement after Brexit: BiP Business Analysis examines current UK procurement procedures and the way in which they are likely or unlikely to change after Brexit.

Report author Eddie Regan said: “If the UK exits the European Union but joins the European Economic Area, there is likely to be little change if any – the one key difference is we won’t have a voice at the negotiating table for future Directives, but we will probably comply voluntarily, just like Norway, Iceland and Switzerland.”

What should Suppliers do?

Unsure of Post-Brexit procurement changes, some suppliers fear getting caught up in changing contract law.

However, with much EU procurement legislation heavily influenced by UK priorities, UK procurement is unlikely to change dramatically following Brexit.

If anything, the public sector should become more attractive to UK suppliers.

One of the main concerns for many firms, including those not currently active in the public sector will be the potential loss of revenue from their existing markets. Aside from the obvious threat to exports, nervousness over the economy might encourage UK customers – both consumers & businesses – to tighten their belts or look for better deals elsewhere.

That’s why now could in fact be the perfect time to start looking at the public sector!

And that’s an outcome that would be good for suppliers AND buyers.

To discover more about the market opportunities read Public Procurement after Brexit: BiP Business Analysis

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EU Referendum: Business Finance Implications

EU Referendum

Rely on facts not feelings

With just two weeks until the EU Referendum vote have you considered how it will affect the money you make?

Both SMEs and large corporations need business finance to grow and employ new staff, functions that will be impacted should access to this finance change.

Both sides of the EU Referendum debate claim that cash flow will rise – or at least not fall – should voters back them. Theses arguments are analysed in BiP Solutions White Paper EU Referendum: The Ins and Outs for Business. The White Paper examines the referendum and its potential implications for UK exports, trade arrangements, business finance, procurement legislation and jobs – all of which will affect the country’s livelihood.

Here’s a sneak peek at the fourth  chapter of EU Referendum: The Ins and Outs for Business – covering Business Finance.

Pro-Brexit commentators argue that high street banks have traditionally provided the major source of SME finance and that this arrangement would be unaffected by a Brexit, as Centre for European Policy Studies Director, Daniel Gros, reflected in the Guardian newspaper.

He said: “Finance to SMEs – and households – is usually provided by local retail banks. In this sense there is no reason why leaving the EU would have a material impact on the availability of finance for SMEs.

“Part of the UK’s retail banking system is owned by EU banks. This investment would of course have a different legal status after Brexit, but presumably the change in legal status would not have a direct impact on retail operations, such as lending to SMEs.”

They also cite the increasingly intercontinental nature of foreign direct investment in the UK, which they argue would largely be unaffected by a Brexit.

However, pro-Europe campaigners forecast that leaving the EU would cause economic uncertainty and devalue UK sterling. An article in the Independent newspaper highlighted the wider implications a Brexit could have on UK business finance. The article published minutes from the Bank of England’s meeting, which said a vote to leave the EU would “result in an extended period of uncertainty about the economic outlook including the prospects for export growth”.

Teamed with this, they say a Brexit would lead to the removal of all EU subsidies, such as CAP, upon which many UK firms depend.

Northern Irish Agriculture Minister Michelle O’Neill said: “In terms of Agriculture and Rural Development, we will have drawn down over £1.9bn of European funding between 2014 and 2020. I fear that a significant reduction in direct support would see production go into free-fall.”

While acknowledging the challenges a Brexit would bring, Vote Leave campaigners argue that it would also bring opportunity to reform UK banks and rid them of the bad habits they have adopted. In the Institute of Economic Affairs (IEA)’s Brexit thesis competition, the winning report, Britain outside the European Union, suggests this could be achieved by introducing a free banking system, which would rid the UK of “excessive financial regulation, central banks and an inconvertible paper currency”.

To read more about the economic implications of the EU Referendum, download EU Referendum: The Ins and Outs for Business.

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EU Referendum: Procurement Legislation Implications

Procurement Legislation

Rely on facts not feelings

On 23 June Britain will choose whether to remain in or leave the European Union. Although this is a decision not to be taken lightly, many companies are still unsure of the facts.

Deloitte’s 35th Quarterly CFO survey concluded that only 26% of CFOs said their companies had taken steps to prepare for the referendum result – a worrying figure considering the direct effect a Remain or Leave vote could have on UK business.

To help professionals understand how the vote will affect UK exports, trade arrangements, business finance, procurement legislation and jobs; procurement specialist BiP Solutions has created an impartial White Paper EU Referendum: The Ins and Outs for Business.

Here’s a sneak peek into the third chapter covering Procurement Legislation.

Procurement legislation simply means the laws that govern the buying and selling of goods; a subject close to the hearts of all professionals.

Remain campaigners claim deviating from the rules of the EU Procurement Directives could cause the UK to effectively exclude itself from the EEA single market and erode or even end London’s status as the financial capital of Europe, with strong negative impacts on the wider economy.

In its 2016 Report, The Economic Consequences of Brexit, the Organisation for Economic Co-operation and Development said: “A UK exit (Brexit) would be a major negative shock to the UK economy. In some respects, Brexit would be akin to a tax on GDP, imposing a persistent and rising cost on the economy that would not be incurred if the UK remained in the EU.”

However, Leave campaigners argue that a Brexit would give the UK a valuable opportunity to disregard some of the more costly aspects of EU procurement legislation and instead adopt a more business-friendly legal regime.

In its 2013 report, Our Global Future: The Business Vision for a Reformed EU, CBI said: “The impact of poorly thought-out and costly EU legislation is a major issue for businesses: 52% of businesses believe that, were the UK to leave the EU, the overall burden of regulation on their business would fall.”

Answering this claim, Remain campaigners in turn contend that many EU Directives are enshrined in UK law, so a Brexit is unlikely to alter the UK’s procurement habits.

Mills & Reeve National Head of Procurement Law, Ruth Smith, and Mills & Reeve Trainee solicitor Tom Benjamin wrote in Procurement Law Today: “Whilst the EU Treaty and EU Procurement Directives would no longer apply in the UK, an ‘out’ decision would have no impact on the validity of the UK legislation put in place to transpose those Directives.”

Even if regulatory reform were to top a post-Brexit government agenda, the Government would be unable to disregard EU Directives, should it wish to remain part of the EEA single market.

Should the UK leave the EU but wish to maintain its single market trade arrangement, it would still have to adhere to EU legislation, but would lose any power to shape this legislation.

Read more about the economic implications of the EU referendum, with EU Referendum: The Ins and Outs for Business.

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