With procurement practitioners and commentators focused on the Procurement Bill currently (May 2023) making its way through the House of Commons, it would be easy to miss the recent Public Procurement (International Trade Agreements) (Amendment) Regulations 2023. There will be separate statutory instruments for Wales and Scotland to ensure that all procurement practitioners apply the updated approach from the ‘go live’ date for the Free Trade Agreements (FTAs) from midnight on the 31st of May 2023.
Why has this legislation been introduced?
The legislation has been introduced as a result of the UK’s new Free Trade Agreements with Australia and New Zealand. It is designed to create a level playing field for trade, so that the experience of companies is consistent when trying to find and win public sector business in any of the other countries who are signatories to these trade agreements.
When does the legislation enter into force and who does it apply to?
This legislation applies to new procurements being commenced on or after the 25th of May 2023, by all contracting authorities in England, Northern Ireland and all contracting authorities in Wales (unless they are devolved Welsh Authorities in which case the Public Procurement (International Trade Agreements) (Amendment) Regulations 2023 does not apply). Nothing in these Regulations affects any procurement commenced before they enter into force.
Welsh Ministers are making a separate statutory instrument to implement the FTAs as they apply to devolved Welsh authorities.
Scotland must also apply the changes being brought about by the FTAs and have already provided information on this in SPPN 1/2023 Public procurement – Australia and New Zealand Free Trade Agreements.
What are the key changes?
- Where procurers are unable to estimate the value a contract, it will now be deemed to meet the relevant threshold and trigger the application of the regulations relevant to the procurement.
- Contracts must not be terminated in a way that circumvents Parts 2 and 3 (Regulations 3 to 73 inclusive) of the Public Contracts Regulations 2015. Whilst contracting authorities were already required to apply the principles of procurement to all decisions taken when terminating contracts and replacing suppliers, this explicit requirement will mean that contracting authorities will have to justify their actions and retain a record of their actions.
- Removal of the option to use a PIN as a call for competition – however this part of the legislation was not often used and therefore is not likely to have much impact.
Prior to the new Procurement Act and any supporting secondary legislation entering into force the changes brought about by the signing of these trade agreements with Australia and New Zealand has required a large number of updates to the wording of the legislation to support these changes.
The Public Procurement (International Trade Agreements) (Amendment) Regulations 2023 makes changes not only to the Public Contracts Regulations 2015, but also the Concession Contracts Regulations 2016, the Utilities Contracts Regulations 2016 with the first and second changes above applying to all three sets of regulations, but the third amendment is made only to the Public Contracts Regulations 2015 and the Utilities Contracts Regulations 2016.
We will provide further information on any more specific changes for Scottish and Welsh procurers as these become available.
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While all information provided is given in good faith, the contents of these articles are not to be construed as legal advice or a substitute for such advice, which you should obtain from your legal advisors if required. We are not and shall not be held responsible for anything done or not done by you as a result of the information provided.
