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Brexit: What happens now for procurement?

Man looking at crossroads with UK flag colours

[Updated: 14/03/2019]

Although the outcome of two major parliamentary votes on Brexit is now clear, very little has actually changed legally – for now. A lot remains to be decided over the coming days and weeks, and various Brexit scenarios remain possible. Here we briefly outline the possibilities and what they might mean for UK procurement.

For more detail on the implications of the different possible outcomes, download our five-page factsheet, ‘Procurement After Brexit.’

What has happened and what is next?

This week Parliament has voted to reject both the withdrawal deal that Prime Minister Theresa May negotiated with the EU, and the possibility of leaving the EU without a deal. There will now be a further vote (on 14th March) as to whether to request an extension to Article 50 and delay the date the UK leaves the European Union. A third vote on the previously-negotiated deal is now scheduled “before or on” 20th March.

Even though parliament has voted to reject a ‘no-deal Brexit’, the UK could still leave the EU without a deal if the ‘EU27’ countries do not agree to extend the Article 50 negotiation period.  Moreover, the scope and effect of any proposed extension remains to be seen. The current legal default position is for the UK to leave the EU without a deal on 29th March.

What if the UK does not leave on 29th March?

It’s worth reiterating that, until the UK formally leaves the EU, it is a full member of the EU. This means that, if there is an extension to Article 50, there will be little legislative difference from the current situation – pending any changes in UK or EU law in the interim.

When the UK does leave the EU, current guidance is that procurement rules as they stand now will be written into UK law under the European Union (Withdrawal) Act 2018. Under current guidance, any procurement procedures that are ongoing when the extension period ends will continue under the same regulations as now until an award is made.

However, the possibility of ‘no deal’ remains real in spite of the recent parliamentary vote, which has no legislative force.

What if there is a ‘no-deal Brexit’?

The Government has repeatedly assured that most regulations around procurement will remain the same regardless of the outcome of Brexit, as the majority of the relevant EU regulations are already written into UK and Scottish law.

It was also announced recently that the UK would be able to join the Government Procurement Agreement (GPA) as an independent member if there is no deal, meaning that UK businesses will be able to continue to bid for contracts in the GPA’s member countries and blocs.

However, in other ways a ‘no-deal Brexit’ would represent major change for UK procurement. UK companies wishing to continue to work with the EU will need to apply for an EORI number. Given the possibility of ‘no deal’ – and that the Government advises that applying for an EORI number takes “around 10 minutes” – companies may want to consider the importance of applying for an EORI number even if it is ‘just in case.’

There is also the possibility that if there is a ‘no-deal’ Brexit, UK organisations will no longer be able to access OJEU. To learn more about the full implications of this, how companies can reduce the amount of action they will need to take, and an in-depth examination of the consequences of different possible Brexit scenarios, download our factsheet, ‘Procurement After Brexit: Deal or No Deal.’

A ‘no deal’ exit is now more likely than before, and the situation remains subject to much change over the next week. For the latest news, its specific consequences for procurement, and Government guidance documents, visit our dedicated Brexit page.

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

New Brexit Guidance for Procurement

Business people figurines shaking hands on map of Europe

The Government has released new guidance specifically aimed at those working in public procurement as to what the effect of the various possible Brexit outcomes will be for the industry.

The Procurement Policy Note (PPN), ‘Preparing the UK for Leaving the EU’, sets out guidance that will be applicable as soon as the UK leaves the EU, scheduled for 29th March. The guidance aims to cover all potential outcomes, whether or not the UK has negotiated a withdrawal deal with the EU. The PPN clarifies areas including how procurement notification requirements in the different constituent countries of the UK will be affected, the currently assumed length and scope of an ‘implementation period’, and – most crucially – the changes that suppliers will have to make if there is a ‘no-deal’ exit.

The PPN and explanatory notes can be accessed here.

BiP Solutions is specifically named in the explanatory ‘frequently asked questions’ supplement to the PPN, as one of the first e-senders to announce plans to integrate with the new, UK-specific tenders notification service that may supersede the Official Journal of the EU (OJEU) in the case of ‘no deal.’ This represents a potential major change for UK suppliers and how they do business. To find out more, read our recently updated guidance document, ‘Procurement After Brexit: Deal or No Deal‘, which complements the Government’s PPN.

For the latest updates on what Brexit means for procurement, visit BiP Solutions’ dedicated Brexit page.

Registration necessary to work with EU after Brexit

Woman at verify login page on computer screen

As preparations for the UK’s departure from the EU intensify, procurement professionals should ensure they are aware of the requirements to register for an Economic Operator and Registration Identification (EORI) number.

Late February’s announcement that UK businesses will be able to continue to trade with members of the GPA in the event of a ‘no-deal Brexit’ is undoubtedly welcome. However, businesses need to take steps to make sure that they will individually be able to do business internationally after 29th March. The primary requirement for businesses looking to continue to work with the EU will be to have an EORI number.

An EORI number is a requirement for moving goods into or out of the EU. The purpose of an EORI number is to allow HMRC to identify your company and collect the appropriate duties. If you do not have an EORI number, you may face delays and even increased costs, for example storage fees if HMRC cannot clear the goods involved in your transaction.

In the event that the UK leaves the European Union without a negotiated deal, you will need an EORI number to continue trading with the EU. This requirement will be effective as of ‘exit day.’

You can apply for an EORI number now even if you do not use it. While the situation around a potential deal between the UK and EU remains dynamic, the possibility of ‘no deal’ means that businesses that currently work with the EU may want to consider the importance of an EORI number. The Government advises that the application process should take less than ten minutes. Ensure that you have all the information you need to apply by viewing the Government’s advice here.

To learn more about how public procurement could be affected by various possible Brexit scenarios, click here to view BiP’s updated factsheet, ‘Procurement After Brexit: Deal or No Deal.’