Regulation 25 – Conditions relating to the GPA and other international agreements

Commentary

Regulation 25 follows closely the drafting of Article 25 of Directive 2014/24/EU and imposes the duty of equal treatment (ie treatment no less favourable than than accorded to EU operators) to the works, supplies, services and economic operators of the signatories of the World Trade Organisation’s Government Procurement Agreement (GPA), and other international agreements by which the EU is bound. 

The only difference between Article 25 of Directive 2014/24/EU and Regulation 25 PCR2015 is that the former refers to “annexes 1, 2, 4 and 5 and the General Notes to the European Union’s Appendix I to the GPA“, whereas the UK’s domestic rule extends the non-discrimination obligation to “annexes 1, 2 and 4 to 7 to the EU’s Appendix 1 to the GPA“. Hence, there seems to be a discrepancy between both rules, and the PCR2015 seem to include more parts of the GPA’s annexes than Directive 2014/24/EU. However, on closer look, there appears to be no difference on substance. 

Understanding why there is no actual difference requires some digging on the scope of coverage of the GPA and its very recent modification, which entered into force in April 2014 (ie after Directive 2014/24/EU was adopted). In the 1994 version of the GPA, the coverage was structured in 5 annexes plus general notes (*). In the revised 2011 version (effective 2014), the coverage was reorganised in 7 annexes, the last being the general notes themselves (**). Both annex structures however have in common that Annex 3 deals with the coverage of “other entities”. 

Directive 2014/24/EU refers to the 1994 version of the GPA (still in force when it was approved), whereas the PCR2015 refer to the 2011 GPA. This can be observed by looking at the definition in Regulation 2(1) PCR2015, according to which “GPA” means the Agreement on Government Procurement between certain parties to the World Trade Organisation signed in Marrakesh on 15th April 1994 as amended–with reference to Council Decision 2014/115/EU on the conclusion of the Protocol Amending the Agreement on Government Procurement. Hence, the drafting difference derives from the modification of the GPA between the approval of Dir 2014/24 and the PCR2015. Ultimately, though, reference to “annexes 1, 2, 4 and 5 and the General Notes to the European Union’s Appendix I to the [1994] GPA” in Art 25 Dir 2014/24 and to “annexes 1, 2 and 4 to 7 to the EU’s Appendix 1 to the [2011] GPA” in Regulation 25 PCR2015 means the same: “everything but Annex 3 on other entities”.

Regardless of this drafting complication, there is not much more to say regarding the transposition of this provision. The more interesting outlook refers to the eventual completion of the European Commission’s project on restricting access to public procurement by third country undertakings (ie non-EU, non-GPA, not-covered by other treaties), which seems to be gaining traction after some hiatus. For background discussion, see K Dawar, The “Proposed ‘Buy European’ Procurement Regulation: An Analysis” (2012) CEPR Global Trade Alert 89-98 and also this paper commissioned by the European Parliament in 2013 to which Pedro contributed with a section.

As a final point, one could add that the “other agreements” part of the Regulation, particularly the forthcoming TTIP agreement between the EU and the USA as there is a chapter on public procurement market access open in the negotiations. If successful, these measures will open up the procurement markets in both sides of the Atlantic more widely than currently in the GPA.

Regulation 25 ensures that whatever conditions are offered in the TTIP to American economic operators, they will not be discriminated against when participating in public procurement procedures in England, Wales and Northern Ireland. For example, imagine that the TTIP includes financial thresholds that are identical to the ones contained in Directive 2014/24/EU which are slightly smaller than the GPA ones. American firms will thus be entitled to equal treatment up from that lower value contained in Directive 2014/24/EU. 

The trade-off offered by the TTIP is that European economic operators (including the ones based in England, Wales and Northern Ireland) will be entitled to similar beneficial access in American public procurement markets. As there are no language barriers between the countries and there is plenty of common legal ground between both jurisdictions, it is natural that UK, Ireland and the USA will see a higher degree of cross-Atlantic procurement than other Member States.

(*) Annex 1: central government entities; Annex 2: sub-central government entities; Annex 3: other entities; Annex 4: services; and Annex 5: construction services. These were accompanied by unnumbered general notes.

(**) Annex 1: central government entities; Annex 2: sub-central government entities; Annex 3: other entities; Annex 4: goods; Annex 5: services; Annex 6: construction services; and Annex 7: general notes. This makes the reference to both annex 7 and general notes an unnecessary repetition.

Proposed citation: Albert Sanchez-Graells & Pedro Telles, (2016) Commentary to the Public Contracts Regulations 2015, available at: www.pcr2015.uk.

Last modified: September 5, 2016 by Pedro Telles

25.  In so far as they are covered by Annexes 1, 2 and 4 to 7 to the EU’s Appendix 1 to the GPA and by the other international agreements by which the EU is bound, contracting authorities shall accord to the works, supplies, services and economic operators of the signatories to those agreements treatment no less favourable than the treatment accorded to the works, supplies, services and economic operators of the EU