Brexit Bidding Implications

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Whatever your views on the Brexit referendum result, we are in a period of unprecedented uncertainty and change. What does this mean for those considering bidding for public sector contracts? Perhaps it will change nothing or perhaps everything:

Nothing

If we consider the detail of procurement procedure, the impact of Brexit will be less than you might imagine. Firstly nothing at all will change until we legally leave the EU. This will be two years after Article 50 is instigated and that may not be until early 2017. This will leave the status quo until 2019. Even then if we remain members of the single market we will have to maintain the current EU driven public procurement laws. 

Additionally, under the EU, we are signatories to the World Trade Organisation’s Government Procurement Agreement. This treaty opens government procurement markets amongst its members. We would certainly want to remain a signatory to the GPA because its other members include countries we are keen to develop more business with, such as China and the USA. A key condition of being a signatory is maintaining standards of openness, transparency and non-discrimination in public procurement, rather like we do under EU rules.

There are some areas in which a future administration may wish to tinker with procurement policy, for example the application of spend quotas for local employment and content, as is practiced in the USA.

Everything

However our business environment is facing a prolonged period of uncertainty, for at least two years and maybe longer. This may leave the economy stagnant or slow growing at best. More businesses may consider this a good time to develop their public sector business to diversify their client base and provide a relatively reliable income stream. This would lead to greater competition in those public markets and effective bidding will be even more critical. 

Of course if the economy performs worse than forecast, tax receipts will reduce and this may lead to further budget cuts and austerity. The government will continue to buy much of what is does now, but those who offer savings will be at an advantage, and those offering new methods to improve service delivery and create ongoing efficiency, even more so. The government will always invest to save. 

Please contact me at john@fernausolutions.co.uk if you want to discuss this or other bidding issues.