How will the latest UK Government BREXIT White Paper effect public sector procurement within the UK the and what potential effect could it have on the approach to both tendering and procurement?
A close examination of PM Theresa Mays mansion house speech delivered on the 2nd March 2018 (for a full draft see here) initally gave some small clues into the greatly anticipated impact that brexit will cause to public sector procurement and tendering, and the likely direction for future UK public sector tending and procurement talks.
Specifically the PM talked in context again about “stability and continuity” for our relations with the EU. Although she also mentioned that existing models “won’t work” and that new solutions will need to be found for our economic relationship. Perhaps all of those comments might point to the fact that everything will change when it comes to cross boarder trade. Explictly public sector procurement rules with the EU and hence internally within the UK; but then again it might not.
If we for a minute ignore the macro points of that initial speech it was interesting to note the following passage:
“The next hard fact is this. If we want good access to each other’s markets, it has to be on fair terms. As with any trade agreement, we must accept the need for binding commitments – for example, we may choose to commit some areas of our regulations like state aid and competition to remaining in step with the EU’s”.
Whin this context the PM was talking about market access.
For public sector tendering and procurement there were three key words here: fair, terms and competition. The current EU public sector procurement regulations are currently based on the basic principles of ‘fair competition’. Perhaps this why these two terms were explicitly included within this initial speech?
On to the BREXIT White Paper
Now on to the PM’s BREXIT White Paper. The white paper states;
8.36 A range of cross-cutting regulations underpin the provision and high standards of goods and services, maintaining a positive environment for businesses, investors and consumers. For example, a common competition and consumer protection framework deals with mergers, monopolies and anti-competitive activity and unfair trading within the EU on a consistent basis, and EU-wide systems facilitate the protection of intellectual property.
The white paper again refers to ‘common competition’ although this time it also refers to ‘unfair competition’ as opposed the earlier mansion house speech ‘fair competition’. With these two ‘signals’ I would suspect that Theresa May is leaning toward a soft brexit as regards public sector procurement and the negotiations will move toward retaining as much of the public sector procurement regulations as possible under the whitepaper. This approach ensures alignment with EU public sector procurement rules.
And the WTO Option?
As we have already commented on in our earlier Great Repeal Bill Post. As a current member of the EU the UK is also member signatory to the World Trade Organisation (WTO) plurilateral agreement on government procurement (or the ‘GPA’) which came into being on the 6th April 2014.
This agreement exists to promote free trade and prevent protectionist practices across world and means that when the EU member states procure public sector contracts outside of the EU, equal rules and remedy based on the GPA procurement process apply.
As we have already noted, it seems that with these small takeaways from the mansion house speech, and the BREXIT White Paper, it seems if, and it is a big if, the UK can negotiate a soft BREXIT deal with the EU based upon the content of the white paper Brexit may not have that much of an impact on public sector procurement procurement regulations after all. But if we were to have a hard brexit all of the current procurement rules and regulations potentitally would not apply!