How will the latest UK Government position effect the 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) 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 the 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”.
In context, this is talking about market access.
For public sector tendering and procurement there are 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’. Is this why these two terms were explicitly included within the speech? If that is the case then although a lot of water still needs to pass under the bridge, I would suspect that if we are to have a soft brexit the negotiations will move toward retaining as much of the public sector procurement regulations as possible. This approach will ensure alignment with EU public sector procurement rules. The rules which will currently to allow EU countries to access a share of the UK governments £122bn spend and UK public sector tenders to continue to be offered to EU countries based on current EU regulations.
And the previously much vaunted WTO Option?
As we have already commented on in our 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.
And as we have already noted, it seems that with these small takeaways from the mansion house speech, if and it seems that now it is a big IF, that if the UK can negotiate a soft BREXIT deal with the EU Brexit may not have that much of an impact on public sector procurement procurement regulations. But if we were to have a hard brexit all current procurement rules and regulautions potentially would not apply!