The unravelling of EU law compliance on the run up to Brexit [Public Procurement Edition]

A few months ago I tweeted that we were on the cups of watching the rule of EU law disappearing before our eyes here in the UK as Brexit approaches. If we consider the CJEU's enforcement of EU law to be the ultimate deterrent for non-compliance, such effect is progressively reduced as time goes on and the exit certainty increases. And as with dam bursts, what starts as a trickle ends up as a flood.

For agents in the field making decisions about how to behave, this reduced influence of EU law will certainly permeate into their decision making thinking. If the risk of being caught and punished is low (and getting lower all the time) why comply with the law in the first place?

This takes me to two stories about public procurement compliance, one from the 90s/00s the other from today. As for the first, I remember when doing my Ph.D on the use of competitive dialogue seeing someone of reputation who shall remain nameless arguing that technically the UK use of the negotiated procedures for PPPs/PFIs in the 90s was non-compliant with EU law, but the fact that the competitive dialogue had been introduced in 2004 showed the country was right. In consequence, it should not be punished for any illegality committed in the meanwhile. And it was not: the proceedings were opened by the Commission but nothing came out of them.

Then this morning Albert tweeted about the Department for International Trade assessing the "cultural fit" of bids. Yes, "cultural fit". This includes "[b]e committed to the best possible outcome for the United Kingdom following its departure from the European Union." We can unpack this criterion in a few different ways and perspectives:

1. It's nothing else other than asking for professional ethic

The least ominous option is that this is simply a new version of the more traditional "ensuring that the contract will be performed professionally and to a high standard." If that is the case, the language could have been different and certainly be included as a contract performance clause and not as an award criterion. But I do not think this option sticks.

2. It's a sign of what it is about to come

The more logical explanation is that the key decision makers are already discounting the compliance of EU law in their decision-making process (even if it violates the Public Contracts Regulations 2015 which are national law) and doing whatever they please. If this interpretation is correct, every decision like this that goes unchecked and is complied with by public servants and the market will increase the likelihood other disregards of EU law will spawn between now and the exit date.

It can be argued that the contract value is below the EU thresholds and as such not subject to the full might of EU regulation in procurement. Even if true, it may be subject to Treaty principles, including equal treatment and non-discrimination. But even if it is a simply purely national contract...

3. It is illegal under Regulation 111 of the Public Contracts Regulation 2015 (PCR2015)

Albert has already highlighted that Regulation 111 of the PCR2015 would be applicable and that the proposed contract breaches it. I agree, and our commentary to that particular Regulation is available here. Regulation 111 is a purely national provision covering contracts that would not be subject to EU law due to their low value. There are grounds to challenge this award criteria and they should be used by any aggrieved bidder (or potential bidder).

4. It is illegal under EU law

If the contract is valued above the EU financial thresholds, then the award criteria would also be illegal as it mixes what could be a selection criterion with the award of the contract and both need to be kept separate. Article 58 of Directive 2014/24/EU was transposed into England and Wales by Regulation 58 of the PCR2015 and our commentary on it is here. Long story short: information about bidders is by definition irrelevant (i.e., illegal) when assessing the bid.*

Furthermore, award criteria need to be relevant to the proposed contract (Regulation 67 PCR2015) and proportionate (Regulation 18 PCR2015) to the aims being pursued. This award criteria is neither. So yes, the Government should be left with its ears burning for this proposed award criteria.

Let's conclude with an analogy: how would we react if instead of a "cultural fit" criterion the contract included a "political fit"? The latter would probably generate uproar but for the purposes of EU law both are questionable (i.e., illegal) for the exact same reasons.

The bottom line for me is that we may finally seeing in this instance the start of a progressive disregard for EU law rules and the deterrent compliance role of the CJEU as an enforcer of EU legality. As an EU citizen, I hope to be proved wrong.

*I could drill down on the legal minutiae of the provisions but this is probably enough to pass the message