Brexit and impact on public procurement in NI/RoI
Ahead of the end of the UK-EU transition period on 31 December, Arthur Cox, our Legal Partners, have developed a short advisory note on What do I need to know about procurement on the island of Ireland?
It is vitally important that members familiarise themselves with this note - specifically for under threshold (less than £5m) public procurement opportunities in the Republic. In summary:
- While the UK was a member of the EU, and during the transition year, EU Treaty principles guarding against discrimination on grounds of nationality applied for under threshold public procurement opportunities.
- As of 1 January, such principles may no longer apply and, consequently, for companies incorporated in either jurisdiction on the island of Ireland, it is likely that queries will arise when participating in competitions in the other jurisdiction - for example in relation to procurements that fall below WTO Government Procurement Agreement threshold of £5m for construction works.
- In the worst case scenario, a UK incorporated company may be excluded from a under threshold public procurement opportunity in the Republic therefore on grounds of nationality.
- It is important to note that, for opportunities above £5m, contracting authorities in the Republic are bound to treat UK incorporated companies no less favourably than they would a company from an EU state.
The Federation has been working on these issues with the various relevant departments of the Northern Ireland Executive, the Northern Ireland Office and InterTradeIreland over the last few weeks.
The reality all is that all who we have engaged with clearly recognise the potential issues this causes for Northern Ireland-based economic operators with respect to under threshold public procurement opportunities in the Republic. However it is, at this point in time, not likely that the issues will be resolved before the end of the year and, therefore, members must clearly understand the potential issues that may emerge.
Ideally, we have identified the need for a Memorandum of Understanding between the UK and Irish Governments to maintain non-discrimination for each other’s economic operators on opportunities below the current threshold. This is something we will continue to push strongly for and will keep you updated on further developments over the coming weeks.
If you encounter any issues in the meantime, particularly as any new under threshold public procurement opportunities in the Republic are published in January, then please immediately let us know.