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Brexit latest: No Deal Brexit and Procurement Legislation

With the Government maintaining that the UK with leave the EU on 31 October, whether or not a Withdrawal Agreement has been finalised, there may appear to be much uncertainty as to the position of legislation after that date, and what immediate effect that will have on trade and other areas of business. However, in procurement as well as in other areas, there are some clear guidelines as to what a ‘no deal Brexit’ would mean for day-to-day working practices. Here, Phillip Kinnell, Senior Procurement Consultant at the Procurement Advice and Support Service (PASS), details what we know about procurement legislation in the event of ‘no deal’ – in our explainer below and in our recent webinar.

Legislative certainty in the event of a no deal Brexit

What procurement legislation applies in the event of a ‘hard’ Brexit? Section 2(1) of the European Union Withdrawal Act 2018 states that ‘EU-derived domestic legislation, as it has effect in domestic law immediately before exit day, continues to have effect in domestic law on and after exit day.’ Section 3(1) similarly confirms the incorporation of direct EU legislation by stating that ‘Direct EU legislation, so far as operative immediately before exit day, forms part of domestic law on and after exit day.’ 

However, there are some incongruities between current legislation, such as the PCR 2015, and the changed environment that we will have following a no deal Brexit. To deal with this, the European Union Withdrawal Act 2018 preserves laws made in the UK that implement EU obligations, and provides the legal basis for making necessary corrections to the current procurement legislation that would otherwise no longer operate appropriately once the UK has left. 

The following paragraphs outline the main pieces of secondary legislation which set out the updates to UK procurement legislation.  

In England, Wales and Northern Ireland, the Public Procurement (Amendment etc) (EU Exit) Regulations 2019 and the Public Procurement (Amendment etc) (EU Exit) (No 2) Regulations 2019 set out the majority of changes to current procurement legislation in the event of a hard Brexit. 

In Scotland, the Public Procurement etc (Scotland) (Amendment) (EU Exit) Regulations 2019, the Public Procurement etc (Scotland) (Amendment) (EU Exit) Amendment Regulations 2019 and the Public Procurement etc. (Miscellaneous Amendments) (Scotland) Regulations 2019 carry out a very similar role.  

The required changes include the removal of references to the EU, the replacement of the OJEU with the ‘UK e-notification service’ (also known as the Find a Tender Service or FTS) and the right of the UK to set the procurement thresholds for the forthcoming change on 1 January 2020. 

Eight months after Brexit, the amendment regulations also remove conditions relating to the GPA (Government Procurement Agreement) and the ‘duty owed to economic operators from other member states’ as from that point the requirement to open up procurement in the UK to economic operators from other states will either not apply or will have be applied separately through a trade or other similar agreement. 

The Defence Regulations will be updated with the Defence and Security Public Contracts (Amendment) (EU Exit) Regulations 2019 which will bring in both pre-exit and exit-related amendments to the Defence and Security Public Contracts Regulations 2011. So while it’s not possible, or advisable, to cover all the changes here, I hope that the above links will help you determine how a no deal Brexit will affect any procurements that are commenced after a no deal Brexit. 

You can here Phillip discuss this and other aspects of post-Brexit procurement in more detail through a recording of our recent webinar, ‘What a No Deal Brexit would Mean for Public Sector Procurement.’ To view the full video, click here.

Autumn Statement Procurement Top Tips

Autumn Statement

The Chancellor of the Exchequer’s recent Autumn Statement offered new routes to leveraging business growth. Here, BiP Solutions journalist Julie Shennan gives 5 top tips for procurement actions to optimise your Autumn Statement opportunities.

With £23 billion of additional government spending pledged in Chancellor of the Exchequer Philip Hammond’s recent Autumn Statement via the new National Productivity Investment Fund, fresh pipelines of work have been outlined in areas such as infrastructure, housing, transport, defence, exports, R&D, oil and gas, communications and media.

Whatever your business sector, the Autumn Statement contains information that you can leverage to cut costs and open up new business opportunities. Here are 5 top tips for post-Autumn Statement good procurement practice.

1. Browse Business Breaks

Every year the Chancellor of the Exchequer gives business financial breaks via the likes of Corporation Tax cuts and business rates relief. These breaks often come with caveats that make them applicable to some businesses but not others; however, it is worth checking if your business qualifies so you can adjust your budget.

Also worth noting is that with each business break there usually comes a time frame for its implementation or a time limit on its duration. For example, in his Autumn Statement 2016 Mr Hammond pledged to cut Corporation Tax to 17% by 2020, suggesting that it may drop incrementally over the next few years.

2. Find Funding

Likewise, the Chancellor’s Autumn Statement often announces funding opportunities for UK business growth, to stimulate things like innovation, local economies and overseas trade. This year the Chancellor pledged £400 million through the British Business Bank to invest in innovative small businesses with potential for growth.

Now that these funding opportunities have been announced, businesses that qualify and are interested should waste no time in contacting the British Business Bank to start their application. Fortune favours the brave, and awarding bodies will not knock on doors offering funding.

3. Utilise U-Turns

Just as suppliers should be diligent in checking the recent Autumn Statement for relevant new announcements, they should also check it for any U-turns on business breaks or funding pledged in previous years.

Each year brings new circumstances and challenges that can force policy U-turns, not least when there has been a change of government. Yet one supplier’s curse is often another supplier’s blessing as the scrapping of relief or funding in one area can lead to that assistance being rechanneled into another.

4. Pursue Pipelines

Arguably the most valuable business information in this year’s Autumn Statement is to be found in the new pipelines of work announced by the Chancellor. These pipelines vary from the rather open ‘£800 million to the Scottish Government for infrastructure projects’ to the more specific ‘£7.6 million for urgent and essential repairs to Wentworth Woodhouse heritage house in South Yorkshire’.

Now that the Autumn Statement has been announced, suppliers should research it for pipelines within their sectors and geographical areas of operation, bearing in mind that some sector pipelines – such as those in construction – have a trickle-down effect into others. For instance, a pipeline for building repairs might also bring security services opportunities to guard the building while the repairs are made.

After identifying a potential future pipeline of work, suppliers should then scan the procurement horizon for this work being put out to tender. This can be done by using a contracts finder service, checking national or local authority contract portals, monitoring news stories, or attending council meetings and networking events.

For best practice guidance on finding contracts, read The Ultimate Guide to Winning Government Contracts, Chapter 4.

5. Contact Contractors

Every now and then an Autumn Statement or Budget goes one step further, not only outlining new pipelines of work but also announcing the Tier 1 contractors who will be running them. For instance, in his Autumn Statement 2016 the Chancellor detailed that £850,000 would be awarded to a Royal Society of the Arts project to promote cultural education in schools. Once the Tier 1 contractor’s name is divulged then suppliers should strike up pre-tender conversations, to establish the scope of sub-contracts available.

Best practice guidance on pre-tender networking can be found in The Ultimate Guide to Winning Government Contracts, Chapter 9.

For more information on government opportunities, visit the BiP Solutions Resources page.

DPRTE is pioneering defence procurement: DSC

BiP DPRTE 2014

Pioneering defence procurement discussions will be held at DPRTE 2016 (on 16 March at Cardiff Motorpoint Arena) as UK Defence Solutions Centre (DSC) joins the DPRTE Innovation Hub. Here, DSC Executive Director of Innovation, Paul Winstanley, tells BiP reporter Domhnall Macinnes about the opportunities this will bring.

Opened on 23 March 2015 by Business Minister Matthew Hancock and Defence Minister Philip Dunne and functioning as an independent entity, the UK Defence Solutions Centre (UK DSC) is a new organisation jointly funded by Government and industry. UK DSC’s participation at DPRTE 2016, at the Innovation Hub, is another major incentive for businesses of all sizes to attend this invaluable procurement event.

A brainchild of the Defence Growth Partnership (DGP), UK DSC is an industry first; operating as an innovation centre where the leading minds in the defence industry can collaborate, advancing the UK’s capabilities and strengthening the UK’s position as a world leader in defence solutions. Attendees at the Innovation Hub will have a unique chance to engage with this new body, making themselves known and learning about UK DSC and the exciting opportunities the organisation presents for any budding innovative company looking to advance the UK’s defence technological capabilities.

Paul Winstanley, Executive Director of Innovation at UK DSC, said: “I would absolutely encourage other organisations to attend DPRTE. The more comprehensive the attendance the more benefits there will be for all industry representatives to reap.”

UK DSC works closely with UKTI DSO and the Customer Advisory Group and seeks customers worldwide; the outcome being a continuously expanding knowledge and understanding of industry requirements over the coming 15 years. UK DSC’s relationship with the UK value chain extends to the most prominent and established defence suppliers, as well as to any SME aspiring to push the boundaries of defence industry solutions with their innovations.

Mr Winstanley explained: “The DSC looks at how Government and industry can work together effectively to deliver prosperity, and furthermore how it can develop this relationship to benefit the defence capability of the industrial supply chain.”

With a background in applying innovative solutions across an extensive range of sectors including defence, Mr Winstanley’s passion now is delivering new technology solutions to defence. Being a new entity, UK DSC plans to fully utilise the opportunity presented at DPRTE to meet a wide variety of industry representatives through networking and raising awareness about prosperity and innovation, both of which Mr Winstanley notes are closely linked.

He commented: “We’re looking at the focus of the event being around acquisition, making sure we take into account the requirement of prosperity in acquisition, while looking more broadly at the role of innovation. You’re innovating, integrating and taking on board innovation as part of delivering prosperity.”

A small DSC team will accompany Mr Winstanley to DPRTE, looking to engage with the defence procurement community and learn of companies’ prosperity agendas.

He said: We engage across the board – we are part of the Defence Growth Partnership which has got the 16 major defence companies engaged already. So reinforcement of that engagement would be good.

“Equally, we recognise that there are many other suppliers in the value chain, ranging from academia to SMEs and midsized companies. We tend not to differentiate; we engage broadly across the entire value chain.”

Then, following the event, UK DSC will offer advice regarding how it can help companies to work towards building a more prosperous UK defence industry.

For more information on this and other procurement events, keep following the BiP Solutions blog…