OJEU Thresholds and Public Procurement - Update 2021

Following the UK’s exit from the EU, the UK government is looking into an overhaul of public procurement policies and practices. Their aim is currently, to create an updated and simplified framework for public procurement.

The UK is no longer subject to EU regulations and now follows UK domestic legislation. From the 1st of January 2021, the UK were no longer subject to EU procurement regulations and therefore no longer follow rules outlined by the OJEU. Tenders and the associated ITTs will now be published on a new e-tendering portal, called Find a Tender Service (FTS) instead of on OJEU.

In terms of public procurement, the UK is now a member of the World Trade Organisation’s (WTO) Government Procurement Agreement (GPA). This allows for the UK to have equal rights to bid on public sector contracts that are proposed by EU members and/or those in agreement with the GPA, and vice versa. The WTO’s GPA also governs procurement thresholds, which will be outlined in this post.

What is OJEU?

The Official Journal of the European Union (OJEU) is an online portal that houses public sector contracts that are over the stated procurement threshold. Since the UK’s departure from the EU, OJEU has been replaced by a UK-only tendering service and there will no longer be a legal requirement to publish procurement contracts on OJEU.

What happens to OJEU after Brexit?

Tenders Electronic Daily (TED), the online procurement portal used by EU member states, is no longer the main platform used for e-tendering in the UK. TED, as a supplement to the OJEU, will be available for any contracts that were accepted before 2021- these will resume on TED/OJEU until their completion. Contracts accepted and not completed before 31 December 2020 are still subject to EU procurement rules and must publish contract updates on OJEU until completion. Once all contracts pre-2021 are completed, the OJEU and TED will no longer be necessary and cease to be used in the UK.

Any procurement rules that are not yet changed or added by the Government from 1st January 2021 will remain in line with EU/OJEU procurement rules as before, as well as adhering to rules presented by the WTO’s GPA. Other than the new changes marked in the Government’s recent PPN’s, procurement law will remain the same until further changes occur- this mirrors the rules that were in place during the Brexit withdrawal/transition period in 2020.

The procurement thresholds will mirror what the WTO sets them as in line with the GPA- this is also followed by OJEU, so thresholds will remain largely unchanged from 2020.

UK and EU Contracts

A free trade deal has been accepted by both the UK and the EU, meaning that UK access to EU markets is easier and still widely available. This does mean however, that the EU rules regarding trading standards are still in effect when trading with EU member states.

As per the agreement between the UK and the EU, UK suppliers can still bid for OJEU contracts but again, EU rules will apply in that scenario. The OJEU thresholds will still govern procurement rules and legislation for EU member states and for non-EU member states when trading with them.

What is the World Trade Organisation’s (WTO) Government Procurement Agreement (GPA)?

The WTO’s GPA is a voluntary trade agreement that governs public procurement. Procurement in the UK post-Brexit followed rules set by OJEU; these rules will now shift to be in line with the GPA. The GPA includes both EU member states and non-EU states. It also outlines procurement principles, thresholds and rules that all those in agreement must adhere to. This agreement will allow the UK to have access to international public procurement.

What will replace OJEU/TED after Brexit?

On the 1st of January 2021, OJEU/TED was replaced by a new e-tendering platform called ‘Find a Tender’ (FTS). If contract spend is over the current WTO GPA threshold, tenders legally need to be posted on Find a Tender. This switch is the most notable and important, immediate effect of Brexit on public procurement.

Find a Tender Service (FTS)

Find a Tender Service is a free service and works in the same format as OJEU/TED. It also works in conjunction with other tender portals, like Contracts Finder and MOD systems, and with other subsidiary portals like Tender Pipeline. The tender portals for Scotland, Wales and Northern Ireland will also remain as they are. If you are looking for above threshold tenders, then FTS in the portal you need. The ‘above’ thresholds for 2021 remain unchanged from the 2020 figures, other than accounting for minor changes in exchange rates, for example.

Tender Pipeline users will not be affected by these changes- customers can still continue to use the portal as normal. Only tenders created and listed after 1st January 2021 will be published on FTS, though older contracts listed on OJEU/TED will still appear on Tender Pipeline until their completion.

If you want to find and tender for any public sector contracts in the EU, you may continue to do so via OJEU/TED.

The new OJEU Procurement Threshold for 2020/2021

If, over the lifetime of a contract or a framework, the spend on said contract equals or exceeds the current thresholds, it must legally follow the OJEU Compliant Route to Market- this could mean advertisement via OJEU.

Post-Brexit, the UK procurement thresholds are governed by the WTO’s GPA. These thresholds are not subject to review or change until January 2022, so thresholds will remain largely the same as the usual, EU figures for now.

The procurement thresholds for the UK are:

*The thresholds are not round figures (as in £4,500,000) as they are based on the historic exchange rate against the Euro. They are also excluding VAT.

How will Brexit affect public procurement?

The new UK ‘above’ thresholds are based on the GPA thresholds, which is what EU members currently follow. This means that the changes to the thresholds will be minimal.

In terms of the WTO and their impact to public procurement, they have additional principles that the UK must now follow.

The new WTO procurement principles consist of:

• Value for money
• Public good
• Efficiency

These principles also include the previous EU principles of transparency, integrity, non-discrimination and fair treatment of suppliers. There will be more focus on the environmental, economic and social side of public procurement in order to encourage contracting authorities to move away from seeing a sole importance in the ‘lowest bid’.

Government’s Procurement Policy Note (PPN)

What is the Government’s Procurement Policy Note (PPN)?

The Government’s Procurement Policy Notes (PPN) are actual policies that highlight the new changes to public procurement from when the UK exited the EU. The latest four that highlight new changes to public procurement in light of Brexit are notes 10/20, 11/20, 01/21 and 02/21.

How will the Government’s Procurement Policy Note (PPN) affect public procurement?

The main point implemented through the Government’s PPN was the introduction of the aforementioned Find a Tender Service (FTS). This service manages tenders and contracts whose overall spend is, or will be, above the current thresholds.

Contracts listed as below the thresholds are not regulated by the GPA, so the UK government is solely in control of these. The Government’s PPN states that tenders/contracts below the WTO GPA threshold can be ‘reserved’ by bidders based in the county that the listed contract is based in. This is to open up more opportunities for SME’s (small/medium sized enterprises).

Government’s Green Paper- Transforming Public Procurement

What is the Government’s Green Paper?

The Government’s Green Paper is a consultation document that highlights all the proposals for a particular subject matter. The Government’s Green Paper, titled ‘Transforming Public Procurement’, was set out in December 2020 and contains proposed policy regarding the future of public procurement in the UK.

There is an allocated time period to voice concerns, give feedback and make suggestions that ends on March 21st 2021. The following points are all proposed policy and will not be approved until a White Paper is published.

How will the Government’s Green Paper affect public procurement?

The UK Government proposes to standardise the tendering process in terms of selection. They seek to consolidate regulations so that all information is based in one system that everyone can access when needed. This comes as a way of fulfilling the Government’s main aim of creating a far more simplified procurement system and regulations that could be overseen by a specifically appointed government body.

The Government also propose that contracting authorities should have the opportunity to exclude particular bidders for negative past performance- this currently is not a viable option for contractors under EU/OJEU procurement law. There is also mention of exploring a potential debarment list.

There is also potential for the creation of a new Dynamic Purchasing System (DPS) that will be used for different types of procurement as well as for goods and services.

If you would like more information on the changes to public procurement due to Brexit, or have any concerns, don’t hesitate to contact us at Thornton & Lowe to learn how we can help you win tenders through our brand new tendering search and selection service.

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