European public procurement after Brexit : what are the prospects for United Kingdom ?

Since the British Government notified the European Council of its intention to leave the European Union and the withdrawal procedure provided for in article 50 TFEU has been initiated, there is a risk that the United Kingdom will be excluded from European public procurement in the absence of an agreement.

The future of the UK with regard to European public contracts seems to depend on the modalities of this exit : what hypotheses can be considered ?

Guarantees preserved for UK in the event of a withdrawal agreement

A  withdrawal agreement was concluded between the UK and the EU in November 2018 (approved by the European Council on November 25th 2018) which provides guarantees to the UK regarding its access to public procurement markets.

Pursuant to title 8 of Part 2 of this Agreement, the current UK procurement rules would continue to apply during the transitional period until the end of 2020. In addition, for contracts launched before January 1st 2021 and still in progress on that date, the rules of the draft withdrawal agreement will continue to apply.

However, no consensus has been yet reached, although Brexit has been postponed to October 31. Since the withdrawal agreement between the British Government and the European Union has already been rejected three times by the British Parliament, the possibility that public contracts may be concluded between the United Kingdom and members of the European Union outside any agreement cannot be completely ruled out.

The Government Procurement Agreement (GPA) as a solution to a « no deal » hypothesis

A « hard brexit » raises fears that the United Kingdom will be excluded from European public procurement, which would lead, in turn, to the exclusion of any EU Member State from the British public procurement procedures.

However, the UK has obtained, through an agreement concluded on November 27th 2018, its participation in the World Trade Organisation’s (WTO) public procurement contracts. It would continue to provide British companies the access to public procurement through non-discriminatory, transparent and open procedures.

The consequences would nevertheless be felt on the extent of public procurement in which the UK could participate : the GPA only concerns contracts whose value is higher than European thresholds in force

( 5.548.000 euros for construction contracts, 144.000 euros for supply and service contracts of central public authorities, 221.000 euros for other supply and service contracts).

In case of the absence of an agreement and without membership of the GPA, contracting authorities may be less inclined to award contracts to British companies outside any international agreement.

While the outcome of a « no deal » will complicate the UK’s economic relations with the EU, the outlook for public procurement in the UK is not necessarily bleak.

Britain will still be able to conclude a free trade agreement with the European Union, similar as to other free trade treaties (JEFTA, CETA), by applying reciprocity agreements on their respective public markets.

Rouguiata BA