Updated Draft Agreement on the UK's withdrawal from the EU [Public Procurement]

The Commission published on March 19th a revised Draft Agreement on the UK's withdrawal from the EU, conveniently colour coded green, yellow and white to denote different levels of agreement between the parties. Green means the text has been agreed but is still subject to technical legal revision, yellow that the policy objective has been agreed upon but drafting changes are still required and white that no agreement has been reached yet.

As regards public procurement (Arts 71 to 74 of the Draft Agreement), the situation is as follows:

Article 71 - Green

Article 72 - All green except paragraph 2.

Article 73 - Yellow

Article 74 - Green

It seems that in what regards to public procurement, progress is being made in reaching an agreement. No major changes are visible to any of the articles in comparison with the original draft from a few weeks ago. As I said in the meanwhile, I find it odd that EU procurement rules will apply only until the procurement procedure is finalised, but not to the contract performance, thus meaning Articles 70 to 73 of Directive 2014/24/EU won't be applicable. Unfortunately, the draft remains unchanged in this point and the parties have accepted it (Draft Agreement Article 72(1) and (4)).

As for Article 72(2) where no agreement has been reached, I am puzzled as for the reasons why. Since Article 72(1) establishes the application of secondary rules to ongoing public procurement procedures, paragraph 2 only re-iterates the applicability of the principle of non-discrimination to the same set of procedures. That is the logical contextual reading of Articles 72(1) and 71 (which includes the definition of relevant rules). Another reading, however, would allow the extension of the principle of non-discrimination to contracts not covered by Article 71, that is contracts not-covered by the Directives: ie, those today subject only to the (horrible) certain cross-border interest. As I said, my guess is that those have been excluded from the scope of application of the Withdrawal Agreement via Article 71, but perhaps the definition of this scope is where the parties are yet to reach an agreement.

The only area where only policy agreement has been achieved is Article 73 pertaining to the Remedies Directives (Directives 89/665/EEC and 92/13/EEC). This can be understood in the negotiation context of the UK not wanting to be subject to the jurisdiction of the Court of Justice. This is, however, speculation on my part. 

Some thoughts on the procurement elements of the EU's Draft Withdrawal Agreement

The Commission has just published today a Draft Withdrawal Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community.

The Draft Withdrawal Agreement sets out the arrangements for the UK's withdrawal from the Union and Title VIII (Articles 71-74) refers to public procurement, namely ongoing procedures at the date of withdrawal.

Most of the content seems non-contentious with the rule of thumb being that public procurement procedures initiated before the date of withdrawal will still be subject to EU substantive and remedies rules as appropriate until they are finalised. This logic applies to traditional procedures (Article 72(1)(a)) and also to framework agreements (Article 72(1)(b)) concluded before the withdrawal. It does not seem to cover however dynamic purchasing systems though - at least not explicitly.

It is worth mentioning however what is meant by a procedure "being finalised". One would assume that for the purposes of Article 72(1)(a) it would be with the contract signature, but not necessarily:

"4. A procedure referred to in paragraph 1 shall be considered finalised:
(a) **upon publication of a contract award notice in accordance with the relevant rules** or, where those rules do not require the publication of a contract award notice, upon conclusion of the relevant contract; or

(b) upon informing tenderers or, according to the relevant rules, persons entitled to otherwise submit applications, of the reasons why the contract was not awarded if the contracting authority or contracting entity decided not to award a contract."

As contracts covered by the Directives do require the publication of contract award notices (even if compliance in practice is shoddy...) it is important to bear in mind the provision of Article 72(4)(a). 

There are no provisions in the Draft Withdrawal Agreement about contracts already awarded and under performance. As such, the conclusion is that performance of contracts post-withdrawal will be subject to the national laws only thus meaning Articles 70 to 73 of Directive 2014/24/EU on contract performance will no longer apply.