Public procurement after Brexit*

The Procurement Act, which became law in 2023 and is expected to take full effect in February 2025, ushers in a new era for public procurement in the UK post-Brexit [1,2]. There has been plenty of debate over how public procurement should be managed since European Commission (EC) Procurement Directives, as transposed into UK law, ceased to apply. While some commentators envisaged a drastically new regime, the content of the Procurement Act indicates that changes to the status quo will be limited and that many of its signature policies resemble what the EC is already doing.

In a legal sense, the Procurement Act consolidates the four sets of EC regulations that previously governed public contracts, utility contracts, concessions contracts and defence contracts in the UK. It is designed to streamline the purchasing process, reduce complexity, and minimise the administrative burden on buyers and suppliers. The Act sets out new rules for selecting suppliers and awarding and managing contracts, including publishing information on key performance indicators (KPIs) and contract terminations. Public buyers will be able to tailor procurement to their specific requirements and have greater latitude over how they do business with suppliers – to be known as the “competitive flexible procedure”.

Value for Money (VfM) remains the overriding priority for public procurement in the UK post-Brexit. Progress has been made in achieving VfM over the last ten years, especially through the rollout of national framework agreements that exploit purchasing economies of scale and reduce administrative costs. The Procurement Act aims to build on this progress, emphasising the importance of financial savings through professional purchasing practices, process efficiencies, and innovative means of fostering competition e.g., by expanding the use of dynamic purchasing systems, which are essentially open-ended framework agreements that suppliers can apply to join at any time.

Alongside VfM, the Act refers to maximising public benefit through procurement. This includes new ways to assess social value in contract awards, tying the award of major contracts to suppliers having carbon reduction plans and paying sub-contractors promptly, and reserving below-threshold contracts for SMEs or local enterprises. The latter aspect is interesting as it breaks with the EC principle of non-discrimination in supplier selection and moves the UK closer to the US model of reserving certain types of contracts for SMEs and other special category firms. Tensions and trade-offs existed between VfM and maximising public benefit in the previous regime, however, and it is unlikely that these will suddenly disappear.

To make procurement more accessible and business-friendly, a single digital platform for searching and applying for contract opportunities in the UK will be launched. A “tell us once” rule will apply whereby suppliers can use their registered details every time they tender and not have to re-submit the same information to different public sector customers. A “noticing regime” that informs suppliers about public authorities’ future procurement intentions will also be introduced. While welcome, these steps are not exactly new. The UK already has digital platforms for public contracts e.g., Contracts Finder, Sell2Wales. Under the previous EC regime suppliers were able to use the European Single Procurement Document (ESPD), which is akin to the “tell us once” rule. Suppliers were also able to learn about the future procurement intentions of public authorities through Prior Information Notices (PINs), which are published on national and EC digital platforms like Tenders Electronic Daily (TED).

The Procurement Act is assertive when it comes to supplier probity. It clarifies the circumstances under which contracting authorities can or must exclude suppliers. For example, a conviction for corporate manslaughter is now mandatory grounds for exclusion. Professional misconduct, sub-par performance and contract breaches remain among the discretionary grounds for supplier exclusion. The Procurement Act also introduces a supplier debarment register for the first time. Government Ministers, not contracting authorities, decide if suppliers are added to the debarment register. One of the reasons for the debarment register is to exclude suppliers that pose a national security risk to the UK.

While the Procurement Act applies to contracting authorities in England, Wales and Northern Ireland, the Scottish Government will maintain its own legal framework on procurement. To accommodate regulatory divergence across the four nations, the Public Procurement Common Framework is in place to enable the UK internal market to function, ensure the UK can enter into new trade agreements, and comply with its existing international obligations on free trade.

The Procurement Act does not change the UK’s commitments under the WTO’s Government Procurement Agreement (GPA). Suppliers from other GPA signatories’, including the EU, the US, Canada, Australia and New Zealand, must be treated the same as domestic suppliers for above-threshold contracts (excluding defence and clinical healthcare procurement). The UK is also bound by its Trade & Cooperation Agreement (TCA) with the EU, which stipulates that EU suppliers operating in the UK must receive equal treatment for above- and below-threshold public contracts. These are reciprocal agreements. UK suppliers will enjoy corresponding access to public procurement markets across the EU and in GPA signatory countries.

With public procurement spending in the region of £300 bn per annum, questions surrounding its objectives, priorities and management are consequential. The overall thrust of the Procurement Act suggests that procurement post-Brexit is going to look a lot like procurement pre-Brexit. VfM is paramount while policies on climate change, social value, fair treatment of sub-contractors, and SME growth have been dusted down and re-packaged. This represents a continuation of the direction of travel in UK public procurement over the last decade, where VfM was pursued even as the Social Value Act 2012 was implemented, and a series of SME-friendly measures were rolled out.

There will still be a foreign supplier presence in the UK public procurement market, reflecting obligations of international free trade agreements and the UK’s own commitment to an open, market-based economy. Suppliers from EU Member States will be able to freely compete for above-threshold contracts and EU suppliers with operations in the UK will be eligible to compete for any contract. As such, the public procurement landscape should not be markedly different from the pre-Brexit era. What is different is that the UK now makes its own rules concerning how public contracts are advertised, awarded and managed, which will hopefully translate into a less bureaucratic and more transparent system that benefits contracting authorities, domestic industry and, ultimately, UK taxpayers.

*An earlier version of this article first appeared on the Cardiff Business School website in October 2023.

1. Jozepa, I (2023). Procurement Bill 2022-23. Research briefing number 9402. House of Commons Library. 05 January 2023, London. Available at: https://commonslibrary.parliament.uk/research-briefings/cbp-9402/
2. Gov.uk (2022). The Procurement Bill – a summary guide to the provisions. 16 June 2022, London. Available: https://www.gov.uk/government/publications/the-procurement-bill-summary-guide-to-the-provisions/the-procurement-bill-a-summary-guide-to-the-provisions