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EU Public Procurement Regulations – a small but valid argument for Brexit?

Yet more regulations

There have been some articles  recently (here, here and here) regarding how obligations placed on the Public Sector by the EU Procurement Directive 2014 are a small but contributory argument for leaving the European Union.

Our work helping companies win public sector contracts exposes us to these Regulations daily and so to try to bring clarity to the debate we have listed a short rebuttal to the most common arguments below.

If we leave the EU then we can scrap the EU procurement regulations.

Perhaps not. Norway and Iceland are obliged to follow exactly the same EU Public Procurement regulations through the EEA agreement. Therefore, if like Norway, we want to continue to sell into European Public Sector export market worth over 400 billion euro then we will need to agree a bi-lateral trade agreement (or set of regulations) that enables us to do so.

We don’t have to follow the template set by Norway and Iceland; we could negotiate a separate agreement like Switzerland.

Swiss procurement law and regulations (Federal Act on Public Procurement) flow, as ours probably would, from their obligations under the WTO GPA, the bilateral agreement between Switzerland the European Union and the EFTA. As a result, Public Procurement regulations in Switzerland cover most of the same constituent elements that we have in the UK such as thresholds, open procurements, bidding procedures and processes. In other words, the Swiss model will, most likely, result in little change from the current status quo.

The EU is a red tape factory, continually adding more and more regulations.

The regulations were transposed in the UK as the Public Contract Regulations 2015, since then  the UK Cabinet Office that has added to these regulations by publishing mandatory or advisory Procurement Policy Notices. There were 16 in 2015, only 4 of which were in direct response to EU initiatives. So 12 of the new rulebooks (often 20 pages long) were English only initiatives. Many of these UK only regulations seem to be very helpful and our clients have welcomed all or most of them; however, it must be acknowledged that most of the Procurement red tape is being created in Whitehall and not Brussels.

These are not our regulations – what about sovereignty?

Agreements such as the DIRECTIVE 2014/24/EU OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL ON PUBLIC PROCUREMENT have to be negotiated between the parties concerned. The UK team was very satisfied with the outcome as can be seen from the official Crown Commercial Service briefing paper hereThese  changes  provide  a  much  more  modern,  flexible  and  commercial  approach  compared  to  the  existing regime. Outdated and superfluous constraints have been removed, and many new features have been added to streamline and modernise public procurement. For  contracting authorities,  this means  being able  to  run procurement exercises  faster, with less  red  tape, and more  focus  on getting  the  right  supplier and  the  best tender. And for suppliers, the process of bidding for public contracts should be quicker, less costly, and less bureaucratic, enabling suppliers to compete more effectively.”   Note, The House of Commons briefing paper is certainly also a worthwhile read

Local Authorities should be allowed to buy from local suppliers.

Local Authorities already have the ability to source locally via the Social Value Act 2012. The problem, is that Local Authorities have been slow on the uptake, to quote Lord Young in his recent review: “despite its growing awareness amongst public bodies, the incorporation of social value in actual procurements appears to be relatively low when considered against the number and value of procurements across the whole public sector”

We don’t need regulations.

It’s true that the regulations are complex. The English regulations run to 128 pages and the package of documents containing the input and drafting of the Scottish Regulations runs to over 1,000 pages. However, the regulations exist to help ensure transparency and good value for money and all countries have them. For example the regulations in the US as at least as complex and far more draconian than those in Europe. So, even if we didn’t have the EU procurement based regulations, its most likely that we would have something similar.

One final thought

One of the biggest red tape hurdles that our customers encounter is that Devolution in the UK has led to a separate set of regulations for Scotland and the Scottish Government duplicating Procurement Frameworks that have already been established by the Crown Commercial Service (example here of a framework that partially duplicates the exceptionally successful UK Digital Marketplace). This duplicates the tendering, administrative and operational overhead effort that our clients have to manage if they want to sell to the entire UK market.

Taken to the extreme, if we devolve Procurement Regulations to the local level we could on end up with +300 plus sets of regulations (one for each local authority), trade wars between each local authority or devolved administration as they try to protect the suppliers on their home turf and 300 bi-lateral trade agreements. Alternatively, we could just have a common set of very carefully considered and drafted rules that enable us to all trade with each other on a level and fair playing field. There is a great example of that here.

 

I would be very pleased to get readers views on this issue or any of the arguments raised above and will publish them on our blog to help flesh out the arguments either way. Please write with comments to Roger.newman@denove.com or follow me on twitter @rndenove

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