EU-UK Procurement Post-Brexit: Key Changes for Businesses
Brexit has brought significant changes to public procurement practices in the UK and EU. The UK now operates under its own set of procurement rules, separate from those of the EU. This gives it more flexibility in shaping its procurement landscape. The Trade and Cooperation Agreement (TCA) between the UK and EU sets out new guidelines for public procurement, aiming to ensure fair competition and transparency.
Understanding the Key Differences
UK's New Position
The UK no longer follows EU procurement laws. Instead, it has its own system based on previous EU rules. The Public Procurement (Amendment etc.) (EU Exit) Regulations 2020 aligned UK rules with the Withdrawal Agreement.
New E-Notification Service
UK contracting authorities now use a new e-notification service called Find a Tender. This replaces the EU's Tenders Electronic Daily system.
Withdrawal Agreement Impact
The Withdrawal Agreement set out how procurement would work during and after the Brexit transition. It ensured ongoing fairness for EU and UK firms bidding on contracts.
The Trade and Cooperation Agreement (TCA)
Trade in Goods and Services
The TCA allows for tariff-free trade in goods between the UK and EU. However, new customs checks and paperwork are now required. For services, UK providers no longer have automatic access to the EU market.
Level Playing Field Provisions
These provisions ensure fair competition between UK and EU businesses. Both sides agreed to maintain high standards in areas like labour rights, environmental protection, and state aid.
Governance and Dispute Settlement
The TCA establishes a joint Partnership Council to oversee the agreement. If disputes arise, the agreement sets out a process to resolve them, including consultations and an independent arbitration tribunal if needed.
Public Procurement in the UK and EU
Regulatory Framework Changes
The UK has introduced new regulations to govern public procurement post-Brexit. A key change is the replacement of the EU's Tenders Electronic Daily (TED) with the UK's Find a Tender service.
Transforming Public Procurement
The Procurement Act 2023 marks a significant shift, creating a single regime for public procurement across England. It aims to simplify and streamline procurement processes.
Key Changes
New procurement procedures, increased transparency requirements, and greater focus on social value in contract awards. These reforms are set to take effect from October 2024.
New Arrangements for Business
Rules of Origin and Customs
New rules of origin determine which products qualify for tariff-free trade. UK exporters must now prove their goods originate in the UK. Customs procedures have also changed, with new paperwork requirements.
Professional Qualifications
The mutual recognition of professional qualifications has ended. UK professionals now face barriers when seeking work in the EU. Each EU country sets its own rules for recognising UK qualifications.
Business Impact
Many companies have hired customs experts or use intermediaries to handle new processes. Businesses must now carefully plan international assignments and check qualification requirements for each EU country.
Cooperation Beyond Trade
Fisheries Management
New arrangements for shared fish stocks and access rights. UK fishing vessels have greater access to British waters but must cooperate with EU counterparts on sustainable practices.
Law Enforcement Cooperation
Continued cooperation in fighting cross-border crime. New extradition procedures and data sharing systems replace previous EU mechanisms.
Thematic Cooperation
UK participation in some EU programmes as a non-member state. Cooperation in areas like scientific research, energy, climate change, and security.
Movement of People and Labour Law
New Residency Rules
EU citizens need visas for long-term UK stays. UK citizens face similar rules in EU nations.
Labour Mobility Changes
End of free movement brings new hurdles for workers moving between UK and EU.
Social Security Coordination
Some coordination remains to protect pension rights for those who've worked in both places.
These changes have significant implications for businesses, particularly those relying on EU workers. UK firms hiring EU staff must now sponsor work visas, adding time and expense to recruitment. Some sectors struggle to fill jobs, especially those that relied heavily on EU workers before Brexit.
Ensuring Fair Competition and IP Protection
UK's Approach to Competition
The UK established its own state aid regime and introduced new competition laws. These regulations aim to foster a level playing field for businesses, covering areas such as mergers, cartels, and abuse of market dominance.
Investment and Market Access
The UK has revised its approach to foreign investment scrutiny and updated public procurement rules to ensure fair access to government contracts. Trade deals often include clauses on fair competition and state aid.
Intellectual Property Protections
The UK created comparable rights for existing EU trademarks and designs. Patent protection remained largely unaffected. The UK established its own system to protect geographical indications.
Governance and Transport Changes
Partnership Council and Joint Committee
Two key bodies manage the EU-UK relationship. The Partnership Council oversees the Trade and Cooperation Agreement, while the Joint Committee handles day-to-day management and dispute resolution.
Impact on Road Transport
New rules limit UK lorry drivers to two trips within the EU over a seven-day period. Cabotage rights have changed, with EU hauliers restricted to one cabotage trip in the UK within seven days of entering.
Aviation Changes
The EU-UK agreement preserves basic air connectivity, but UK airlines have lost the right to operate flights between two points in the EU. This has forced UK airlines to restructure their operations and route networks.
Frequently Asked Questions
Brexit has significantly transformed the UK's procurement landscape, introducing new laws and trade relationships.
How does the Procurement Act 2024 differ from the previous EU procurement regulations?
The Act provides UK public bodies more contract award flexibility, simplifying procedures for faster decision-making.
It now emphasizes social value and innovation.
What constitutes a direct award under the UK's Procurement Act 2023?
Direct awards are permitted for low-value contracts and emergencies, bypassing full tender processes.
Clear criteria ensure fairness and transparency in these awards.
What are the implications of the Section 60 investigation under the new Procurement Act?
Section 60 investigations scrutinize procurement decisions for fairness and legality, potentially resulting in contract cancellations.
They aim to maintain integrity in the procurement process.
Which aspects of EU-UK trade flows have been significantly affected by changes in procurement laws post-Brexit?
Cross-border procurement has changed, with UK and EU firms losing automatic access to each other's public contracts.
This has triggered a shift in trade patterns.
In what ways does the 'Transforming Public Procurement Green Paper' aim to overhaul the procurement process?
The Green Paper proposes streamlining procurement into three main types, reducing bureaucracy and improving efficiency.
It suggests new value assessment methods, considering broader societal and environmental benefits.
What mechanisms are in place for discretionary exclusion within the current UK procurement legislation?
The legislation allows excluding suppliers based on past performance or unethical behaviour.
Contracting authorities have discretion but must follow guidelines ensuring fair treatment.