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Brexit

Public procurement

Major implications

 

Mutual and equal access to the EU internal procurement market?

It is most likely that, regardless of the final form of Brexit, the UK will want to keep access to the EU internal procurement market for its local businesses.

Approximately one fifth of the EU GDP is made up of procurement of works, goods and services. Such access is usually based on reciprocity, meaning that Belgian (and other EU) companies will obtain the right to participate in UK tender procedures.

Furthermore, parties will want to ensure an absolute equality of bidders, meaning that Belgian tenderers will have to be treated on an equal footing with UK bidders and vice versa.

European Free Trade Association (EFTA)

However, such mutual and equal access does not necessarily imply a bilateral agreement between the UK and the EU. If, for example, the UK should become part of the European Free Trade Association (EFTA), like, amongst others, Norway, it will automatically participate in the EU’s internal market and will be subject to the EU’s Public Procurement Directives (which apply to the entire European Economic Area). Of course, this means accepting the free movement of persons as well as of goods & services.

Government Procurement Agreement (GPA) within the framework of the WTO

But even without membership of EFTA, the UK will become a fully independent member of the World Trade Organisation (WTO). WTO members can join the Government Procurement Agreement (GPA). All parties to the GPA must treat tenderers from other GPA parties no less favourably than domestic bidders. The GPA also sets out transparent and impartial procurement procedures, not unlike the EU Public Procurement Directives. Although limited to listed works, goods and services of a value exceeding specified threshold values and tendered out by well-defined contracting authorities within the GPA parties (for details on the so-called 'coverage schedules', see https://e-gpa.wto.org/), the GPA will guarantee both UK and Belgian companies access to a significant part of the local markets involved.

Future International Procurement Instrument (IPI)

In addition, the UK will possibly also benefit from the yet-to-be-implemented International Procurement Instrument (IPI), a tool proposed by the European Commission to promote open access to public procurement markets around the world (for details, see https://ec.europa.eu/growth/single-market/public-procurement/international_en ).

Future UK procurement law

Finally, as procurement of works, goods and services is essential to governmental operations, the UK will always need to apply an efficient legal framework, based on known principles such as transparency and workable competition. It is therefore unlikely that it will use this legislation to completely shut off its internal market to outside bidders. Such measures would undoubtedly result in higher prices and poorer quality.

This said, it cannot be excluded that future UK procurement law will diverge from the EU Directives, increasing the bid cost for Belgian companies looking to work for UK contracting authorities.

To do

 

  • Bear in mind that there will no longer be a harmonized EU procurement law applicable when entering into a UK tendering procedure, unless the UK should become part of EFTA.
  • Take into account that future UK procurement law could diverge from the EU’s Public Procurement Directives in such a way that access for European bidders to the UK procurement market would be limited and/or would lead to an increased bid cost.

 

If you have any questions, send us an e-mail (brexit@lydian.be)
or contact Jens Debièvre, + 32 2 787 90 85 or
jens.debievre@lydian.be

 

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