Public Procurement

Procurement rules cover the procedures for the tender of contracts by governmental bodies for goods, works and services above a certain value. Governmental bodies include central government departments, local government and most state sector bodies. The rules also cover certain private-sector utility providers such as in the areas of water, electricity and gas. There are some very limited exclusions in sensitive areas, such as security.

Pre-Brexit

Until the end of 2020, Ireland and the UK were covered by a single EU-wide system of procurement rules. They required the advertising of tender opportunities above certain levels in the EU Official Journal and the Tenders Electronic Daily website. All qualified tenderers based anywhere in the EU can take part in public procurement tenderers run by governmental and utility bodies anywhere in the EU. 

There are detailed rules about the timelines and procedures for tenders. The procedures must be transparent and open. Online / and electronic means should be used to the extent possible. The rules are designed to facilitate tenders from any qualified contractor within the EU. 

There are very strong protections under the EU rules which prevent discrimination against tenderers from other EU states. There are rights to take immediate court action which may stop the tender, cancel contracts and award compensation where the rules have been breached.

Post-Brexit

From 1 January 2021, the UK is no longer part of the EU-wide system of procurement. EU suppliers do not have the benefit of the EU system of rules for tender competitions in the United Kingdom and United Kingdom suppliers do not have the benefit of the EU system of rules for tender competitions in the European Union including the Republic of Ireland. 

The EU UK Trade and Cooperation Agreement has put in place new procurement guarantees which will continue to allow suppliers of goods, services and contractors for works, who are based in the EU and the UK, to tender for, participate in competitions and be awarded public sector contracts in the other’s territory. 

The new rules apply to Irish-based suppliers tendering for public sector contracts in the United Kingdom and to United Kingdom-based suppliers tendering for public sectors in Ireland. The guarantees are broadly very similar to those under the existing EU rules.

See the FAQ section in relation to the values of contracts to which the EU rules and the new EU UK TCA rules apply. The value threshold usually applies to the total value of a framework contract, involving later mini-competitions between panel members. Where contracts are below the value thresholds for the EU UK TCA rules, but above the thresholds for which the EU rules apply, discrimination against suppliers based in the other territory (EU or UK ) is generally prohibited.

 A number of sensitive sectors are excluded from the EU rules already. The new EU UK rules also have exclusions which are broader than those under the EU rules. They are determined by detailed schedules filed with the World Trade Organisation specifying the areas covered.

Rights under the EU UK TCA

Suppliers in Ireland and the UK are entitled to participate in procurement competitions in the other state, in the sectors covered, There are guarantees of equal treatment. The public authority may not discriminate on the basis of not having a presence or experience in its state provided that it has the equivalent relevant experience and competence elsewhere. 

The basic rules and facilitations by which tenders are to be published and dealt with electronically to the extent possible, facilitated proof of competence and qualification, guaranteed timelines and other arrangements to allow free and fair competition, will be broadly similar. 

Technical specifications are not to comprise an unnecessary obstacle. For example, the procuring authority is not to prescribe unnecessary technical specifications, trademarks and patents that might unjustifiably discriminate against providers in the other territory. 

Importantly, suppliers from the other jurisdiction are entitled to apply for redress including a court order stopping the process,  potentially invalidating an award and/or granting compensation, where there has been a breach of the guarantees.

 The UK system of procurement will continue for the moment, to be very similar to that which applied last year.UK opportunities will no longer be published in the EU Journal and the TED website. The UK has replaced the publication of tenders through the EU journal and portal with the new “Find a Tender” system and portal. 

The UK intends to streamline its procurement rules and has published a Green Paper before Christmas which sets out proposals for simplification and reform. The look and feel of the UK procurement system will not be the same as that in EU states. However, the above protections and guarantees for participation by suppliers will apply.

FAQs

What are procurement rules?

Procurement refers to tendering for contracts for goods, services and works by public sector bodies. They are designed to secure free and fair competition for suppliers, and to achieve the most economically advantageous tender price and terms for the public sector body.

Where are public contract opportunities advertised?

The new UK portal is here

https://www.find-tender.service.gov.uk/Search  

 

eTendersNI advertises opportunities for providing goods, services and works to Northern Ireland government department, agencies and utilities.

https://etendersni.gov.uk/epps/home.do  

 

etenders advertises procurement opportunities in Ireland

https://www.etenders.gov.ie/  

What are the value thresholds for the EU procurement rules?

There are different limits depending on the type of contract and the type of procurement authority concerned.

 The main limits under the EU rules are:

€139 000 for most types of services and supplies purchased by central government authorities

€5,350 000 for construction contracts 

What are the value thresholds for the new EU UK procurement rules?

The main limits under the EU UK TCA are:

€438,000 / £378,660 for most goods and services

€5,350,000 / £4,733,252 for construction contracts

 The EU UK TCA further provides for non-discrimination of EU companies established in the UK (and vice versa) for small-value procurement, i.e. below the threshold of the GPA (from €139,000 to €438,000, depending on the contracting entity, and EUR 5,350,000 for construction services ).

Does the Northern Ireland Protocol apply to procurement?

No. Northern Ireland is subject to the new United Kingdom procurement rules. The EU rules apply only to certain aspects of the electricity market, which support the all-island energy arrangements.

What is the position on existing contracts?

Tenders that commenced prior to 2021 continue to be subject to the EU-wide rules.

Existing contracts and tenders also continue under the pre-2021 EU rules. Accordingly, those who have been awarded such contracts will continue to have the benefit of the existing EU rules. This also applies to frameworks under which a panel is established for a particular period.

 Generally, Brexit will not change the position under existing contracts that have been awarded. However, it is necessary to look at the particular terms of the contract as the contract requirements might be affected by Brexit. For example, it might be required that products comply with certain standards or that contractors or employees of certain qualifications. In some cases performance may be more difficult because of customs and other new costs.

What sectors are covered by the new EU UK guarantee?

The sectors that are covered are broad, but not all sectors are covered. The sectors covered are defined by detailed lists filed by the EU and UK with the World Trade Organisation. They are available online at the World Trade Organisation’s website. The EU UK Trade Agreement expands upon these lists of sectors, so that it is necessary to consider both lists in order to confirm whether it applies to a particular sector.

What redress would I have for breach of the new procurement guarantees?

There will be a right to take action before an independent body such as a court. It may grant an order suspending the competition, may invalidate a contract awarded or award compensation where there has been a breach of the rules.

What guarantees will I have under the EU UK TCA?

Authorities cannot discriminate against suppliers based in the other jurisdiction. They must take into account, qualifications resources and experience gained in the other jurisdiction. They may not make unnecessary requirements which effectively discriminate against suppliers from the other jurisdiction. If the supplier from the other jurisdiction forms a company in the tendering authority’s jurisdiction, they must take into account the experience and competence available to it in its home jurisdiction.

What further guidance is available?

The EU has published an updated Readiness Notice on 25 January 2021 which goes into detail on the new rules.

https://ec.europa.eu/info/sites/info/files/notice_to_stakeholders_brexit_public_procurement.pdf

 

The UK Cabinet office has published advice for public authorities businesses and other organisations on public sector procurement 

https://www.gov.uk/guidance/public-sector-procurement

Things to Watch For

Do the procurement rules apply to all public sector contracts?

No. The EU rules do not apply below certain value thresholds and to certain very sensitive sectors and types of types of contracts.

 The new EU UK Trade and Cooperation Agreement guarantees apply in the sectors specified. It is necessary to look at the very precise sectoral rules filed by the EU and UK with the World Trade Organisation as varied by the TCA to see the precise sectors included and excluded.

 If your business has an important government contract in the other jurisdiction, it is important that you check the position well in advance of renewal. There are some sectors where the EU rules might have applied but the new rules will not apply.

Will I be excluded from tender competitions where the new guarantees do not apply?

Even where the EU UK TCA guarantees do not apply, Irish and UK public authorities may choose to permit tenderers based in the other jurisdiction to participate. However, they are not obliged to do so. They will be treated in the same way as tenderers from other non-EU countries and will have limited protection. In some such cases, there are limits on the percentage of products that may come from outside the EU under the contract. 

Where the guarantees do not apply, it will be necessary to consider the qualifications applicable to tenderers in the sector and for the contract concerned. They will usually be published in the tender documents. Where a business has an important contract, it would be desirable to pre-empt this question with the authority concerned, well before renewal of the contract concerned.