Procurement in a Nutshell – the triggering of Brexit
04th April 2017
On 29 March 2017, Prime Minister Theresa May wrote to European Council President Donald Tusk to notify him of the UK's intention to leave the EU.
The following day, the Government published the White Paper “Legislating for the United Kingdom’s withdrawal from the European Union“.
The document sets out the Government’s proposals for “ensuring a functioning statute book” once the UK leaves the EU. This update explains what these first steps in the Brexit process mean for public procurement law.
What happens next?
The triggering of Article 50 gives the UK and the EU a period of two years within which to reach an agreement on Britain’s exit from the EU. Unless an agreement is made regarding an extension to the negotiating period, the UK will leave the EU by 29 March 2019 at the latest.
The Great Repeal Bill is scheduled to be introduced at the start of the next parliamentary session.
Once enacted, it will repeal the European Communities Act 1972, which is the legislation which gives effect to EU law in the UK.
The legislation will, “wherever practical and appropriate”, convert the body of existing European Union into UK law. The legislation will not come into effect until the UK leaves the EU.
The reason for taking this approach, the Government has said, is to “provide maximum certainty” as the UK leaves the EU, ensuring that there is no change overnight in the law.
What does this mean for public procurement?
For the duration of the two year negotiating period the UK remains a member of the EU. The EU Procurement Directives and the associated implementing UK legislation continue to apply, namely:
Public Procurement Directive 2014 (Directive 2014/24) = Public Contracts Regulations 2015
Concessions Directive 2014 (Directive 2014/23) = Concessions Contracts Regulations 2016
Utilities Directive 2014 (Directive 2014/25) = Utilities Contracts Regulations 2016
Contracting Authorities (CAs) must continue to act in accordance with the EU procurement rules, the case law of the Court of Justice of the European Union should be followed and the oversight of the European Commission remains.
Why is this important?
Uncertainty remains regarding the long term post-Brexit outlook. As we have explained in a previous post, the future for procurement regulation in the UK post-Brexit will depend on the relationship established between the UK and the EU, in particular the free trade agreement (if any) which is reached.
Draft guidelines published by the Council of the European Union following the UK’s notification under Article 50 serve as a reminder of the unpredictable and changing political setting within which Brexit will unfold, stating as a core principle of the EU’s approach that “nothing is agreed until everything is agreed”.
However, CAs have the assurance that it is business as usual for the next two years. When the Great Repeal Bill comes into force the procurement regulations will be preserved. Any repeal or reform will take place at a date following the UK’s exit from the EU.
CAs should continue to follow the current rules with an emphasis on achieving best practice, to support a smooth transition if and when any reform is made to UK procurement legislation.
How can I find out more?
If you have any queries on the issues raised or on any aspect of procurement, please contact us via our procurement hotline on 0191 204 4464.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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