WPPN 04/20: Procurement Reform and Common Framework for Public Procurement

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• A Wales of more cohesive communities

WPPN 04/2020 has been produced by the Welsh Government (WG) to provide clarity to Welsh Public Sector (WPS) Contracting Authorities on Procurement Reform and the Common Framework for Public Procurement.

Procurement Reform and the Common Framework are two separate areas. Procurement reform is about long-term ambitions and potential changes to the procurement regulations, whereas the Common Framework is a new mechanism by which the four UK administrations will handle UK and international policy issues as the UK exits its membership of the EU.

The purpose of this document is to clarify the objectives of Procurement Reform and the Common Framework respectively.

This WPPN is for the attention of all WPS contracting authorities in Wales, including WG departments, NHS Wales’s bodies, Welsh Government Sponsored Bodies, local authorities and the wider public sector.

Please circulate this WPPN within and to relevant organisations that you are responsible for, drawing it to the specific attention of those with a procurement or commercial role.

The UK officially left the EU on the 31 January 2020 and entered into a Transition Period which will end on the 31 December 2020.

Procurement Reform

The UK’s departure from the EU provides WG with the opportunity to reform current procurement regulations.

Any procurement reform will need to comply with the World Trade Organisation’s Agreement on Government Procurement (GPA) and procurement provisions set out in Free Trade Agreements.

Procurement is not reserved and is the responsibility of Welsh Ministers. Welsh Ministers may wish to introduce Welsh legislation for various reasons, e.g. to ensure that any new legislation in the area of procurement aligns to WG’s policy ambitions and priorities, to allow flexibility for any potential future changes required to legislation, etc.

Before Welsh Ministers make their decision, Welsh stakeholders will be asked for their views in an engagement exercise which will take place in January and February 2021.

The engagement exercise will include obtaining stakeholder views on the UK Government’s Green Paper proposals on Procurement Reform so WG can assess if they have potential benefits for Wales.

Common Framework

After the EU transition period ends on 31 December, the devolved governments will gain more scope in non-reserved areas such as procurement that have previously been regulated at an EU level.

As part of the UK’s preparations, intergovernmental frameworks, known as ‘Common Frameworks’, are being negotiated jointly between UK Government, the Welsh Government, the Scottish Government and the Northern Ireland Executive.

Common Frameworks are aligned with the principles set out in the Communique published by the Joint Ministerial Committee for European Negotiation (JMC (EN)) in October 2017.  Entitled ‘Coordination of Domestic and International Policy Issues on Public Procurement’, the Common Framework for public procurement will provide a mechanism by which the four UK administrations handle UK and international policy issues involving public procurement.

As public procurement is not a reserved matter, the Welsh Government and other UK administrations will continue to determine their own policies for public procurement. However, early notification for any new policies, policy changes, consultations, etc. must be given to the other UK administrations through the Common Framework. This is to ensure the other UK administrations have an opportunity to discuss any potential impacts they consider the changes may have on the UK as a whole.

The Common Framework will not prevent one or more of the UK administrations working collaboratively on policy areas should they choose to do so.

Procurement Reform

The WG plans to undertake stakeholder engagement during January and February 2021 to help inform its position on procurement reform.

Further information on engagement activities will be sent to stakeholders soon.

Welsh stakeholders are also able to respond to the UK Government’s Green Paper consultation should they want to but WG would be grateful if they would also copy their responses to CommercialPolicy@gov.wales.

Common Framework

In order to ensure the WG benefits reciprocally from the agreement, we will need to meet our responsibilities within the Common Framework.

It is the WG’s responsibility to advise the other UK administrations of any proposed policy changes, consultations, etc. on behalf of the Welsh public sector.

Procurement Reform

The following legislation would be considered for procurement reform:

• The Public Contracts Regulations 2015
• The Concession Contracts Regulations 2016
• The Utilities Contract Regulations 2016

Common Framework Agreement

The Common Framework for public procurement covers all four UK administrations and therefore the relevant legislation for this Common Framework is as follows:

• The Public Contracts Regulations 2015
• The Concession Contracts Regulations 2016
• The Utilities Contract Regulations 2016

This WPPN is effective from the date of publication (December 2020)  and is relevant until it is superseded or cancelled.

Procurement Reform

UKG is hoping to have primary legislation in Parliament towards the latter part of 2021, receiving Royal Assent at the beginning of 2022, with secondary legislation anticipated to follow in 2022/23. Implementation would then follow in 2024.

If Welsh Ministers decide to legislate, it is likely the legislation would be introduced later than this.

Common Framework Agreement

A provisional Outline Common Framework agreement will be operational after the Transition Period has ended on 31 December 2020. The final Common Framework is anticipated to be completed in 2021.

If you have any questions about this WPPN, please contact; Commercial Policy – Polisi Masnachol : CommercialPolicy@gov.wales  or Caffael.Trefniadau Pontio’r UE – Procurement.EU Transition: Procurement.EUTransition@gov.wales

The following publications and organisations (links are provided where appropriate) were utilised in the preparation of this WPPN:

• UK Government’s Green Paper: Transforming public procurement.