Post-Brexit UK Public Procurement Reform

The Procurement Bill announced in the Queen’s Speech at the opening of Parliament in May 2021 was one of 30 new bills on the UK government’s legislative agenda for the coming year.  The main aim of the Procurement Bill is to reform the government procurement process in the UK and create replacements for the current legislative regime which is based on the system implemented across the EU.  Coming relatively soon after Brexit, this will be a test of how far the UK government is prepared to go to create regulatory “disalignment” between the UK and the EU.

This is a quick turnaround based on the Cabinet Office’s consultation on its Green Paper to transform public procurement, which we discussed in a previous blog post and which only closed in March 2021.

Although the Cabinet Office is still analyzing the consultation responses and has not yet published the outcome or any further proposed action, the Procurement Bill’s inclusion in the UK legislative agenda means that the government has already decided to press ahead with plans to differentiate the UK procurement system from the current regime based on EU rules.  This is no real surprise, particularly as government ministers regularly describe the EU procurement rules as “complex” and “rigid”.  Even in the ministerial foreword of the Green Paper, Lord Agnew, Minister of State of the Cabinet Office, describes the EU regime as “outdated” and “bogged down in bureaucratic, process-driven procedures”.

The new UK regime will consolidate many existing regulations governing public procurement to create a single, uniform framework, including for defense procurement.  The UK government hopes that this framework will be quicker, simpler and better able to meet the country’s needs while remaining compliant with its international obligations.

Although the exact form of the Procurement Bill has not yet been released, its main elements are likely to include:

  • confirming the overriding importance of certain key principles of public procurement: value for money, public benefit, transparency, integrity, fair treatment of suppliers, and non-discrimination;
  • overhauling the existing procurement procedures which are seen as too rigid and inflexible, and replacing them with three simple, modern procedures (allowing the public sector more scope to negotiate with potential suppliers to deliver innovative new solutions);
  • introducing procurement processes that allow contracting authorities to procure quickly for serious situations that are declared a crisis, with strengthened safeguards for transparency;
  • establishing a single data platform for supplier registration which ensures that suppliers only have to submit their data once to qualify for any public sector procurement;
  • tackling unacceptable behavior such as supplier fraud through new exclusion rules and giving government buyers better tools to take account of a bidder’s past performance; and
  • reforming the process for challenging procurement decisions to speed up the review system and make it more accessible and capping the level of damages available to bidders in order to reduce the attractiveness of speculative claims.

Some aspects of the new Procurement Bill are likely to get more scrutiny than others, particularly those affecting transparency in the procurement process – especially in the light of concerns about cronyism in the procurement of supplies in response to the COVID-19 pandemic.

The provisions in the Procurement Bill will apply to all contracting authorities in England and to contracting authorities carrying out reserved functions in Scotland, Wales and Northern Ireland.  The UK government is in discussions with the devolved Welsh and Scottish governments and Northern Ireland Executive about the application of some provisions.

Businesses will also need to look out for the UK government’s first National Procurement Policy Statement (NPPS).  Under the new Procurement Bill, buyers will be required by law to apply the strategic national priorities for public procurements set out in the NPPS.

So how different will the UK’s new system look?  We won’t know that until the publication of the draft Procurement Bill itself.  But it is worth remembering that the new regime must stay within the parameters of the UK’s international agreements, namely the requirements of the WTO’s Agreement on Government Procurement (GPA) and the terms of the EU-UK Trade and Co-operation Agreement (TCA).  So while the UK government is driving towards a new procurement regime, we don’t expect to see significant changes in direction in the procurement rules.

The UK government has already shown its desire in other areas to prove that the EU led to red tape and bureaucracy, and to ensure that post-Brexit laws will reduce administration costs.  But can it simplify the process without losing trust in what has proven over many years to be, by and large, a stable, relatively transparent, largely non-discriminatory system?

Georgia-Louise Kinsella, a trainee solicitor in the London office, assisted in the preparation of this article.