Universities in the UK have been adjusting to the new realities since the end of the Brexit transition period on 31 December 2020.

Key issue: EU structural funds and grant agreements generally require compliance with EU procurement law. The UK is, since 1/1/21, no longer routinely advertising contracts in the OJEU and there is a concern that Find A Tender is not sufficient for the purposes of certain EU grant funds. The Scottish Government has issued guidance to this effect, but similar guidance is awaited from CCS for England, Wales and Northern Ireland.

Action point: The PCR should be followed using a voluntary OJEU notice alongside an FTS advert for any procurements which will or could use EU funds. This is to mitigate against the risk of a negative audit or claw back of grant from EU funders.

Background and analysis

Although the UK Government is consulting on a new set of public procurement regulations, at present, the modified Public Contracts Regulations 2015 (which derive from EU law) continue to apply in the UK.

This means that, providing a university meets the definition of a 'body governed by public law' for the purposes of the PCR, the rules continue to apply to it.

One area that has changed is the advertising obligation that flows from the PCR; the UK now advertises opportunities via Find A Tender (FTS) (www.find-tenderservice.gov.uk) rather than the Official Journal of the European Union (OJEU).

This poses an immediate practical issue for projects funded by ERDF, ESIF or other EU structural or research funds. It is a common condition of an EU grant funding arrangement that any procurement (eg of the equipment or services needed to deliver the funded project) be procured in accordance with the EU rules including OJEU advertisement.

The UK/EU Withdrawal Agreement is clear that any procurement activity started on or before 31 December 2020 in the UK continues to be subject to the OJEU advertisement obligation. The full PCR (and EU Treaty protections) apply to that procurement or framework until its conclusion or expiry (whichever is later).

In addition, Article 138 of the Withdrawal Agreement confirmed that EU public procurement rules continue to apply after 31 December 2020 and to the end of the programme period, within the context of the implementation of ESI Funds.

Whether a scheme requires full compliance with EU procurement rules, or with 'national procurement rules', will depend on the wording of the grant agreement.

The European Commission has advised that UK access to the OJEU will be maintained for the purpose of implementing ESIF requirements. Universities and other public bodies should therefore submit both FTS and OJEU notices for such projects, and should ensure that the OJEU notice correctly states that the project is funded by EU funds in section II.2.13.

The Scottish Government has published an amended policy note (Changes to procurement legislation at the end of the EU Exit Transition Period: SPPN 11/2020 - gov.scot (www.gov.scot) to confirm that projects which are "linked to European Structural and Investment Funds (ESIF) programmes [continue to be subject to] EU law [which] continues to apply to ESIF procurements which start after the end of the EU exit Transition Period. Any projects financed by EU funds need to comply with the EU public procurement directives".

Practically, this means that there is a 'twin tracking' of procurement obligations - both the EU and the UK advertising requirements - for some time yet. Given the volume of EU funded projects in the UK HE market, and the risk of increased scrutiny/audit from the EU on how the UK applies these funds, the risk of clawback or negative audit findings cannot be underestimated.

For more information or advice, please contact David Hansom ([email protected]) or Hannah Chapelhow ([email protected]) in Clyde & Co's procurement law team.

UPDATE (19 April 2021): this policy note has been updated to help public bodies in handling procurements linked to European Structural and Investment Funds (ESIF) programmes. It highlights that EU law continues to apply to ESIF procurements which start after the end of the EU exit Transition Period.

https://www.gov.scot/publications/changes-to-procurement-legislation-at-the-end-of-the-eu-exit-transition-period-sppn-11-2020/