The end of 2020 saw the conclusion of the long awaited Brexit trade deal. The deal allows the UK to maintain a procurement system which is separate from that of the European Union (EU). This allows UK law to diverge from laws previously made to implement EU directives. The Government has already indicated its desire to diverge from EU public procurement law with the publication, at the end of last year, of the Green Paper titled ‘Transforming Public Procurement’.
The Green Paper provides the first insight into the Government’s approach to public procurement following Brexit., Given that one of the stated aims of Brexit was to obtain relief from EU ‘red tape’, the Government will no doubt be eager to flex its newly won legislative freedom. The Green Paper makes it clear that a new easier, clearer, and more flexible approach is envisioned. If that is possible, it will certainly be welcomed by those working in public procurement.
While the UK is free of EU limitations on public procurement law, it should be noted that the UK has acceded to the World Trade Organisation (WTO) Government Procurement Agreement as an independent party. The UK’s ability to make its own public procurement rules is limited by certain principles in the WTO agreement. As those same principles underpin EU procurement law, divergence from EU law may be more noticeable in the detail of the law, rather than the overarching principles.
The Green Paper makes recommendations across the field of public procurement. Perhaps the most striking proposal is the intended divergence from a prescriptive rules-based process to what could be described as ‘outcomes focused’ regulation. Rather than focus on the detailed minutiae of each procurement procedure the Green Paper suggests focusing on the overriding obligations of non-discrimination, transparency and openness, avoiding conflicts of interest and preventing corruption.
In order to achieve this, the Green Paper suggests, the separate but similar sets of obligations for public bodies such as local authorities, utilities and those entering into concession contracts (within the Public Contracts Regulations 2015, the Utilities Contracts Regulations 2016 and the Concessions Contracts Regulations 2016, respectively) should be streamlined into a single set of rules. The Green Paper notes that this would remove the quirks that have developed where similar rules exist which are applied differently due to small differences in statutory wording. Furthermore, it is proposed that the seven different tender procedures which are currently available to contracting authorities should be replaced with just three.
Out of the three new tender procedures, two are proposed to be retained from existing procedures, with only limited amendments. These are the Open Procedure and the Limited Tendering Procedure (currently the Negotiated Procedure). Those procedures would be used for ‘off the shelf’ style tenders and emergency tenders .. What is more interesting is the creation of the third, flexible and bespoke procedure. This would allow authorities to create their own tender procedure subject to the overriding principles listed above.
Many may be excited at the prospective ability to create a bespoke tender procedure. The benefits of being able to specifically tailor a tender procedure to the goods or services being procured are obvious. However, and as the Green Paper notes, with flexibility comes risk. Statutory codes may simply be replaced with volumes of case law generated by a flood of litigation around bespoke tenders. Aside from the significant costs and time incurred by such litigation, there would be the dual effect that case law would reduce the flexibility of the bespoke system and make it more difficult for authorities to access and understand the rules. This would substantially undermine the purpose of the proposed reform.
The above changes are just an example of a myriad of changes proposed by the Green Paper. Whilst it is not clear to what extend these reforms will be adopted by parliament, it is clear we can expect a shake up in the public procurement sector in the years to come. We will continue to pay close attention to the progress of these reforms and will be on hand to support our clients throughout the process.
The Green Paper has been issued for consultation, and the existing EU-derived law remains in place for now. The medium-term future for procurement law, however, is exciting and full of possibilities.
For more information on the topic please contact Michael Winder or another member of our Local Authorities/Procurement team.
