Brexit and public procurement law

Brexit - currently still a “never ending story”: Many people are tired of hearing about the topic. Nevertheless, Brexit also has an impact on public procurement law in Germany. At present, the British House of Commons is still arguing about how Brexit should be performed, the result of which is still open. The extent to which the UK will be at a disadvantage compared to other Member States when public contracts are awarded in the future will depend on the decision. In the case of a “hard” Brexit, the United Kingdom will revert back to “third country” status. This means that UK suppliers of goods and services will be subject to the same rules as all other non-EU bidders.

Thus, in the EU member states and therefore also in Germany, tenders submitted in the water, energy and transport sectors may be rejected or excluded from the award of contracts if more than 50% of the total services originates in Great Britain. This also applies if the proportion of products from Great Britain is less than 50%, but together with other third countries accounts for 50% of the total value.

In the fields of defence and security, economic entities from the United Kingdom may in principle be excluded from participation in procurement procedures. This applies not only to economic players from Great Britain, but also to all those who rely on security audits in Great Britain. Whether or not these security clearances can be considered equivalent under the national laws and regulations of a Member State, they do not need to be recognised. At least for a transitional period until 31.12.2020, bidders from the United Kingdom would be treated as they were before – if, and only if, the withdrawal agreement negotiated between the British government and the EU were approved by the House of Commons. Article 76 para. 2 of this agreement provides, for example, that during the transitional period the public procurement directives shall continue to apply in the United Kingdom for the award procedures carried out there and that the principle of equal treatment must be observed vis-à-vis bidders from Great Britain.

In the case of an unregulated Brexit, EU bidders could no longer rely on the public procurement directives and UK bidders could - but would not have to - be treated as third country bidders.

It therefore remains to be seen whether a “happy ending” is possible after all in this area of law.

Prof. Wolfgang Trautner
Benita Rupp
HEUSSEN Rechtsanwaltsgesellschaft mbH Frankfurt am Main