Last month, the Cabinet Office released Procurement Policy Note (PPN) 02/21 which provides further procurement guidance for contracting authorities following Brexit.
The note applies to all contracting authorities, including councils and registered providers of social housing, and utilities, such as ports and energy providers. It reminds contracting authorities and utilities of their obligations under both the World Trade Organisation (WTO) Agreement on Government Procurement (GPA) and the UK/EU Trade and Cooperation Agreement (TCA).
Prior to Brexit the UK was party to the GPA by virtue of its membership of the EU. The UK has now acceded to the GPA directly as an independent member. The result is, therefore, that the rules laid down in the GPA continue to contracting authorities and utilities as they previously did. As the PPN notes, by complying fully with domestic procurement law authorities will comply with their duties under the GPA, so there is no extra burden on contracting authorities and utilities.
The GPA contains requirements relating to advertisement of contracts as well as rules on timescales and award criteria. Importantly, the GPA prevents contracting authorities and utilities from treating domestic suppliers differently from non-domestic GPA ones. The application of the GPA remains subject to value thresholds, the detail of which can be found in Appendix I of the GPA.
Whilst the TCA has not yet been formally ratified by the EU, it has been binding on contracting authorities and utilities since the 1st January 2021. The TCA provides for improved UK market access for EU based business post-Brexit, given that the UK is now a non-EU third-country. The TCA also allows UK based businesses to compete for EU contracts. The PPN requires contracting authorities to familiarise themselves with the requirements of the TCA. The TCA applies where the GPA applies, as well as in the situations listed in Annex B of PPROC-1 within the TCA.
The TCA provides that, to the extent domestic law is inconsistent with the TCA, the provisions of the TCA are to be read into domestic law. For the most part domestic public procurement law is consistent with the TCA given that it derives from EU Directives. It should be noted, however, that the TCA requires the number of suppliers involved in a procurement to be sufficient to ensure genuine competition. Whilst these rules are already present in the Public Contracts Regulations 2015 (PCR), they are not contained in the Utilities Contracts Regulations 2016 (UCR). The UCR should therefore be read as though it contains these requirements.
The TCA also requires contracting authorities and utilities which receive an abnormally low bid to clarify with the tenderer whether that bid takes into account state subsidies. This requirement is not currently contained in the UCR or PCR. The principles of non-discrimination in relation to EU owned UK based business contained within the UCR and PCR are extended by the TCA to procurements not previously covered by those regulations.
The PPN requires all contracting authorities and utilities (referred together as contracting authorities for the purpose of the PPN) to familiarise themselves with the UK’s commitments under the GPA and TCA, as explained in the PPN. The PPN can be found here.
For more information on the topic please contact Michael Winder or another member of our Procurement Team.
