Once upon a time Brexiteers dreamt of the abandonment of most or all procurement law, and certainly anything with a whiff of the EU about it. Let’s see what they’ve done about that in the EU-UK Trade and Cooperation Agreement. I should emphasise that this is early days with this text, and I am sure there are many nooks and crannies I have not yet worked out. All comments and corrections are very gratefully received!
The text of the EU-UK Trade and Cooperation Agreement is dated on 24th December 2020 and became generally available on 26th December. I have already commented in an earlier blog on how it is expected to come into effect, but no doubt we’ll learn more on this during the week. I’m going to refer to the Agreement as the TCA until we discover what we’re supposed to call it. If you need to refer to the other relevant documents on the EU-UK relationship you’ll find them set out at https://eurelationslaw.com/agreements., including a link to the TCA.
In this entry I am going to try to work out the intent of the provisions dealing with procurement. That involves some cross reference with the terms of the WTO Government Procurement Agreement (“GPA”). I do not propose to comment on the text much as that will require further thought.
The public procurement provisions in the TCA are in two parts, in Title VI: Public Procurement and the separate annex, ANNEX PPROC-1: Public Procurement. You can find these sections at page 148 and page 775 of the currently published text. The numbering in the current text is said to be provisional. Each section is currently internally numbered, so provisions on procurement are Article PPROC.1 etc. No doubt this will change.
Article PPROC.1 states the objective. Perhaps in light of some of my comments this year about trade forming an unduly narrow basis for procurement law, it is significant that the objective is not confined to guaranteeing access to participation in public procurement but also refers to enhancement of transparency of public procedures.
Article PPROC.2 starts by defining what range of procurement is covered by the TCA. Generally the TCA adopts the content and language of the GPA and builds on that. This can give rise to a double confusion. First, GPA terms are not the terms we are used to in our day to day legal environment, and second GPA terms are used and then in at least one place given different meaning from that used in the GPA.
So “covered procurement” for the purposes of the TCA includes everything covered by the GPA under Article II GPA as well as procurement listed in section B of Annex PPROC-1. I am a little uncertain about how precisely this will work out as the TCA refers to the Annexes of each Party (EU and UK) to Appendix I to the GPA, but the UK’s Annexes have not yet been published and the EU’s is out of date. One possibility would be that the WTO arrangements and the TCA are to be based on the out of date lists for the EU and UK currently on the WTO website for the EU, but it seems odd to start so far out of date! Given that the notes in Annex PPROC refer to various UK Annexes to the GPA, I think we can assume that this material has been drafted by reference to various documents that exist but are not yet in the public domain.
Covered procurement for the TCA is much broader than that provided for under the GPA. Section B of the Annex PPROC-1 brings procurement by utilities into the scope of the TCA. At first reading it would seem that this covers more or less exactly the same scope as is covered by the Utilities Contracts Regulations 2016.
In addition, a range of services that are currently out of scope of the EU’s GPA annexes are brought into the scope of the TCA. These overlap with but do not correspond directly to the services covered by the light touch regime, as defined in Schedule 3 to the Public Contracts Regulations 2015. Consistently with the usage in the GPA the numerical references to the categories used are to the UN Central Product Classification rather than the EU Common Procurement Vocabulary so there will be some checking across as to what is or is not covered. The list in the TCA includes telecommunications related services and real estate services. I may have got this wrong, but the “other business services” referred to seem include things like credit collection, telephone answering, translation, mailing list compilation and mailing and interior design. Broadly speaking, health related services are not covered.
It would be interesting to know how this range of services were identified, and in particular to understand what the parties thought the economic significance of this arrangement is expected to be. Unfortunately one would have to see the parties’ own internal trade flow modelling to understand that.
Article PPROC.3 to Article PPROC.8 Having stated the scope of public covered, the following articles identify certain additions to the parties’ existing GPA obligations. First there are provisions on e-procurement. There is a limit imposed on the amount of information that is required to be provided with a tender to show that the tenderer is not to be excluded under Regulation 57 of the Public Contracts Regulations 2015, or its equivalent in other UK regimes, or in EU countries, as well as constraints on the application of conditions for participation and registration systems.
Article PPROC.8 establishes the important baseline that for selective tendering (any process in which qualified suppliers are invited to submit a tender) the procuring entity must invite enough bids to ensure genuine competition, without affecting operational efficiency of the procurement system. This maintains the starting point for tenderer selection that the opportunities for such competition should be kept open. Markets should not therefore be closed simply by narrowing all tender processes to one or two bidders.
Article PPROC.9 retains the right of a procuring entity to look at the impact of any subsidy in supporting the submission of an abnormally low tender. This reflects the concerns reflected in the recent EU Commission White Paper on foreign subsidies which placed particular emphasis on the impact of subsidy on procurement. On that see the recent zoom event we ran at King’s with George Washington University at https://publicprocurementinternational.com/webinar-kcl-gw-ec-white-paper/ (with materials also available at that link) as well as the blog post I contributed to on that topic at https://ielp.worldtradelaw.net/2020/10/guest-post-the-eu-gives-foreign-subsidies-its-best-shot-one-take-on-white-paper-on-levelling-the-pla.html.
Article PPROC.10 retains the role of environmental, social and labour considerations in procurement decisions, as long as they are compatible with the rules established elsewhere in Articles PPROC.1 to 11. This keeps in play all the difficult questions we continue to grapple with as to how and how far these matters should be incorporated into procurement decision making. Given the sorts of ongoing initiatives I referred to in yesterday’s blog, this may raise interesting questions in UK law, and in consideration as to how far UK and EU law may or will diverge. A topic I will come back to is how far this provision cross-refers to the Level Playing Field provisions in Title XI of the TCA which set out an intricate procedure to tie the UK into the EU’s position on labour, social, environmental or climate protection standards. For some first thoughts on that by others see https://ielp.worldtradelaw.net/2020/12/a-few-quick-thoughts-on-the-rebalancing-provisions-on-the-level-playing-field-in-uk-eu-trade-agreeme.html
Article PPROC.11 is a long provision dealing with domestic review procedures and has to be read against the backdrop of Article XVIII of the GPA dealing with Domestic Review Procedures. From the UK side it is plain that this text was prepared with an eye on the UK’s plans for procurement law revision in mind and I propose to devote some separate space addressing this provision with the discussion in the UK’s current consultation as they clearly dovetail together. The structure set out here looks rather like the Competition Appeal Tribunal and if procurement law review is going to become a forum for reviewing the strengths and weaknesses of that tribunal we are going to need to clear space for more than a few blog entries!
The next chapter of this part of the TCA includes two provisions Article PPROC.12 and 13 under the general heading “National treatment beyond covered procurement”. This innocuous little passage introduces an obligation in any national procurement to treat EU and UK providers no less favourably than a provider from the relevant state would be treated. This covers all procurement, even if not covered by the Articles PPROC.1 to 11, unless covered by specific GPA exceptions such as security. This means that to the extent that a procurement process is set up for, say, a health related service which is not covered by the list identified in Article PPROC.2, the process must be set up so that an EU provider is treated no less favourably than a UK provider. I need to think this through a little further, but at first blush it seems to mean that wherever there is public procurement it will end up being offered on a cross border basis. The nebulous problems of the “sufficient cross border interest” test return?
The next chapter includes Articles PPROC.14 to 16 and covers modification and rectification of the provisions. Rectification seems to mean something more like “correction to keep up to date” rather than an English law notion of rectification. I am sure that these provisions are important, but we have enough to do thinking about the new regime without worrying how it might change – for the moment. So I will leave that for another day.
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As already noted, this is my first skate through so do please point out all that I have missed or mistaken. As may have been expected, this section of the TCA seems to go a long way to maintaining something approaching the status quo while leaving a measure of elbow room for legal reform within the UK and it may be that the constraints on the UK’s action are not that much greater than would have flowed from GPA membership anyway. However, it also seems clear that there are a number of features of this part of the TCA which ensure that the UK and EU are going to be locked into an eternal dialogue on certain key aspects of procurement law and policy, particularly given that both parties are going to want to be seen to be using procurement to press forward with social policy and climate change agendas over the next few months and years.