The day the United Kingdom left the European Union, much more changed besides political and trade borders, but it is safe to say that few areas have changed so dramatically for the UK as public procurement has. After having followed EU directives as to how tenders were issued and awarded, the country decided it was time to develop its own framework.
This resulted in the UK’s Procurement Act 2023, which promised to cut red tape, promote flexibility, and make public procurement more accessible to businesses. But has it delivered on these promises, or has it simply ‘changed the locks but kept the same floor plan’?
This article takes a closer look at the two frameworks and explores what they mean for businesses on both sides of the English Channel.
The UK's new Procurement Act
On October 16, 2023, the UK’s first homegrown procurement law to be introduced in decades received Royal Assent. It consolidated over 350 EU-derived regulations into one 150-page framework for use in England, Wales, and Northern Ireland. Generally speaking, contracting authorities welcomed the changes, but suppliers struggled once the new act was rolled out.
The Procurement Act introduced two main award procedures:
- The open procedure is a familiar, single-stage tender similar to the EU model, which basically allows any interested supplier to submit a bid
- The competitive flexible procedure is a customizable, multi-stage process whereby an authority designs its own tender and can incorporate a set of processes in the procedure, including steps such as negotiation, dialogue, or a demonstration, allowing them to make better, more informed decisions.
Key differences between the UK and EU procurement systems
The EU’s 2014 Procurement Directive is basically a standardization mechanism, and tools like the European Single Procurement Document (ESPD) allow companies to bid across 27 EU member nations using one dossier. The tenders are separated into very rigid categories – Open, Restricted, or Negotiated – all of which have fixed timelines and rules.
Conversely, the UK's new model is more principles-oriented. The Single Procurement Document did away with the ESPD, ditching EU templates for a softer, more liberal approach. Contracting authorities have the freedom to establish the selection criteria, provided they are seen to be fair and transparent.
For SMEs, the picture is nuanced. Westminster eliminated pre-qualification questionnaires for contracts under £100k, while the EU relies on turnover thresholds and lot subdivision to level the playing field.
Transparency systems have also diverged. The Find a Tender portal has replaced TED (the Tender Electronic Daily), but as this lacks the teeth of Brussels' enforcement, it represents more regulatory freedom.
Perhaps most striking is the shift in market access. Once part of a 27-nation procurement playground, UK companies now have to navigate a patchwork of Agreements on Government Procurement (GPA) and bilateral deals, with Northern Ireland awkwardly straddling both worlds under the Windsor Framework.
The question is not how much these systems differ, but whether businesses can adapt to playing by two rulebooks simultaneously.
Challenges for businesses operating across borders
Companies looking to work with both UK and EU contracting authorities have to deal with a set of challenges associated with Brexit.
After Brexit, the UK lost its privileged status and became a ‘third-country’ bidder and, as a result, is subject to stricter scrutiny.
Now, bidding for an EU contract involves proving compliance with Brussels’ standards, which is an additional, often costly, hurdle. Want to supply medical devices to France? Be prepared to submit ISO certifications, GDPR audits, and French-language tender documents.
Another limitation for UK companies occurs within the tender arena. While the EU-UK Trade and Cooperation Agreement (TCA) ensures that UK businesses can still bid on most EU contracts, they no longer have guaranteed access to all tenders. For example, contracts outside the scope of the TCA, such as certain public services covered by the EU's ‘light-touch regime’, are under no obligation to accept bids from UK companies.
The Windsor Framework keeps Northern Ireland semi-aligned with EU goods rules. An Irish company can follow EU protocols for tenders in Dublin and UK rules for contracts in, say, London. Needless to say, this can be a very taxing learning curve for many businesses, particularly SMEs.
The important question here is how to adapt to this. Will companies hire bilingual compliance officers? Partner with EU-based allies? Or retreat to domestic markets? For now, the answer hinges on one calculation – whether the cost of playing with two rulebooks outweighs the prize.
Opportunities for UK and EU businesses
Brexit has redrawn the procurement map, forcing businesses to rethink their strategies to navigate the UK and EU systems. The challenge for a UK company bidding on an EU tender lies in proving compliance with Brussels’ standards as a third-country supplier.
This means grappling with GDPR audits, ISO certifications, and language-specific documentation, which can be expensive hurdles that could deter smaller players.
But UK firms could establish partnerships with local entities in EU member states, which would offer a practical workaround, allowing UK businesses to leverage established networks and reduce administrative barriers.
On the flip side, EU firms bidding for UK contracts must familiarize themselves with the new procedures introduced by the Procurement Act 2023.
The Competitive Flexible Procedure – a multi-stage award process – provides contracting authorities with unprecedented discretion to tailor a tender’s criteria.
Transparency requirements are also evolving, with mandatory publication of performance notices and KPIs for contracts over £5 million being required. Being aware of and anticipating new provisions is vital for EU suppliers aiming to compete effectively.
For UK SMEs, the country’s simplified processes offer a rare silver lining. The removal of pre-qualification questionnaires for contracts under £100k has opened doors to smaller firms, while frameworks like the Contracts Finder centralize opportunities. Beyond domestic markets, SMEs can tap into global procurement through the WTO GPA, accessing tenders in countries like Japan and Canada. Diversifying revenue streams beyond traditional EU markets could prove a lifeline for SMEs navigating the uncertainty of post-Brexit procurement procedures.
The bottom line
The UK’s Procurement Act 2023 marked a significant break from the EU’s rigid, directive-driven framework, offering a more flexible, principles-based approach. While contracting authorities have welcomed the streamlined processes and greater discretion, suppliers face a steep learning curve. The Competitive Flexible Procedure, for instance, empowers authorities to design bespoke tender processes, but it also demands adaptability from bidders accustomed to the EU’s standardized playbook.
The divergence between the UK and EU systems is stark:
- The EU’s 2014 Procurement Directive thrives on uniformity, with tools like the ESPD enabling seamless cross-border bidding.
- In contrast, the UK’s model prioritizes flexibility, forgoing templates for a more liberal, principles-oriented approach.
This shift creates both challenges and opportunities. For SMEs, the UK’s simplified processes, such as eliminating pre-qualification questionnaires for smaller contracts, are a boon, but for businesses operating across borders, the dual rulebooks mean navigating a labyrinth of compliance hurdles.
The real test lies in the ability to adapt. UK companies targeting EU tenders must grapple with third-country status, often relying on partnerships with local entities to mitigate administrative burdens. Meanwhile, EU suppliers eyeing UK contracts must master the nuances of the Procurement Act 2023, from its flexible procedures to the evolving transparency requirements. For SMEs, diversification beyond traditional markets through frameworks such as the WTO GPA offers something of a lifeline in an uncertain landscape.