Government Procurement Agreement
- The GPA is a plurilateral agreement which mutually opens up government procurement markets among its parties within the framework of the WTO. The UK acceded as an independent party on 1 January 2021.
- The GPA consists of (a) the main text of the agreement and (b) schedules of coverage. The main text establishes rules for transparent and non-discriminatory conditions of competition in government procurement. These rules apply to procurement activities that parties have agreed to cover under the GPA. Details of the entities, goods, services and value thresholds for procurement activities in specific jurisdictions are set out in the schedules of coverage.
- The Trade Act provides the Government and the devolved authorities with the power to make the changes to domestic legislation which are necessary to ensure the UK’s obligations arising from its status as an independent party to the GPA can be fully implemented. It also ensures that the UK is able to take action against GPA parties who do not observe their obligations to the UK.
Section 1: Implementation of the Agreement on Government Procurement
- The GPA was negotiated and agreed in 1994 following negotiations between likeminded countries on bringing procurement within the field of international It entered into force on 1 January 1996. Subsequent negotiations between the parties took place and a revised version of the GPA was adopted on 30 March 2012 and entered into force on 6 April 2014 by means of the Protocol Amending the Agreement on Government Procurement (the 2012 Protocol). All GPA parties have adopted the 2012 Protocol.
- The GPA is a WTO plurilateral agreement. WTO plurilateral agreements are voluntary and not all WTO members are obliged to join, unlike the WTO multilateral agreements which are binding on all WTO members. The GPA is between 21 parties within the WTO membership,2 including many of the major economies such as the United States, Canada, the EU and It aims to mutually open government procurement markets among its parties, and seeks to address trade barriers, such as preferential treatment of domestic goods and services, in the government procurement sector.
2 The 21 GPA parties are Armenia, Australia, Canada, the EU, Hong Kong, Iceland, Israel, Japan, Republic of Korea, Liechtenstein, Moldova, Montenegro, the Netherlands with respect to Aruba, New Zealand, Norway, Singapore, Switzerland, Chinese Taipei, Ukraine, the United States and the UK.
- The GPA sets out a high-level framework of rules to ensure fair, open and transparent competition for government procurement covered by the agreement. It also contains provisions to ensure that GPA parties provide effective review The market access offered by each Party is set out in its Annexes, which list the entities and type of procurement covered by the GPA; this is known collectively as “coverage”. The Annexes also set out the various financial thresholds over which procurement is covered under the GPA. Goods, services or entities not addressed in a Party’s annexes are not covered by the Agreement. This allows parties to decide what level of market access they provide to other parties, and to include, or exclude, goods, services or entities from the cover given.
- The power in section 1 of the Act enables the UK and the devolved authorities to make changes to domestic law necessary for the UK to meet obligations arising from its independent membership of the GPA.
- Before the GPA can came into force for the UK as an independent party, the UK had to ensure that the agreement could be implemented domestically. When the UK was an EU Member State, the UK’s obligations under the GPA were implemented by secondary legislation made under powers in section 2(2) of the European Communities Act 1972 (ECA), the effect of which was saved by the European Union (Withdrawal Agreement) Act 2020 for the duration of the transition period. The European Union (Withdrawal) Act 2018, as amended by the European Union (Withdrawal Agreement) Act 2020, preserved in UK law the EU law existing at the end of the transition period, and allowed it to be amended to make it work in a UK context. The implementation of the UK’s existing obligations under the GPA was preserved in this way.
- However, this does not enable the UK to give full effect in domestic law to obligations arising from its independent accession to the GPA. To ensure that the UK’s obligations arising from independent accession to the GPA can be fully implemented, the power in section 1 of the Act gives the Government and devolved authorities (“appropriate authorities”) the power to make regulations to implement changes to domestic law which are and will be necessary for the UK to meet its obligations as an independent party to the GPA.
- The UK currently gives effect to its GPA obligations in domestic public procurement regulations. For England, Wales and Northern Ireland these include the Public Contracts Regulations 2015, the Utilities Contract Regulations 2016 and the Concession Contracts Regulations For Scotland, these include Scottish procurement regulations, namely the Public Contracts (Scotland) Regulations 2015, the Utilities Contracts (Scotland) Regulations 2016 and the Concession Contracts (Scotland) Regulations 2016. These sets of regulations implement EU Directives 2014/24/EU, 2014/25/EU, 2014/23/EU, 89/665/EEC and 92/13/EEC.
- In both sets of regulations, contracting authorities and utilities are placed under an obligation to accord to the goods, services and suppliers of the signatories to the GPA treatment that is no less favourable than the treatment accorded to the goods, services and suppliers of the UK.
- Section 1(1) provides a power for appropriate authorities to make regulations for five purposes:
- Subsection (1)(a) allows an appropriate authority to make regulations for the purpose of implementing the GPA. An example of how the UK might use this power is to amend existing secondary legislation to refer to the version of the GPA which reflects the UK as an independent party, and which includes the UK’s coverage schedules.
- Subsection (1)(b)(i) permits an appropriate authority to make regulations to reflect new parties acceding to the GPA or existing parties withdrawing from GPA. An example of how the power could be used would be to extend rights and remedies to a newly acceding party’s suppliers once that party accedes.
- Subsection (1)(b)(ii) allows an appropriate authority to make regulations to enforce the UK’s rights under the GPA in the event of a dispute between the UK and another GPA party, by suspending concessions or other obligations to that GPA party or to provide mutually acceptable non-financial compensation should the UK need to increase concessions or other obligations where it is not able to bring itself into compliance. An example of how the power could be used would be to amend the Public Contract Regulations 2015 to exclude from public procurement suppliers of goods or services established in or operating from that GPA party’s territory.
- Subsection (1)(b)(iii) allows an appropriate authority to make regulations, where required, which are consequential on other parties making modifications to their market access schedules in their Appendix I to the GPA. Examples of how the power could be used would be extending market access to suppliers from an expanded territory of a GPA party, for example if a new member joins the EU, or withdrawing equivalent coverage from a party where a UK objection to another party’s modification has not been resolved.
- Subsection (1)(b)(iv) allows an appropriate authority to make regulations to reflect any modifications to the list of central government entities of the UK listed in Annex 1 to the UK’s Appendix I to the GPA. The UK committed to commencing the process for updating the list of central government entities in its Annex 1 shortly after acceding to the GPA as an independent party. This subsection allows the UK to implement the updated list of central government entities in domestic legislation.
- Section 1(2) sets out limitations on when regulations made under Section 1(1) may come into force:
- Subsection (2)(a) provides that regulations made under subsection (1)(a) may not come into force before the day on which the UK accedes to the GPA. The wording reflects the fact that, under Article XXII:2 of the GPA, to accede to the GPA, a party must deposit with the Director-General of the WTO an instrument of accession that states the terms which have been The GPA will then enter into force for that party on the 30th day following the party depositing its instrument of accession.
- Subsection (2)(b) provides that regulations made under subsection (1)(b)(i) may not, in the case of a new party joining the GPA, come into force before the day on which the new party accedes. In the case of a party withdrawing from the GPA, regulations made under subsection (1)(b)(i) may not come into force before the day on which the party withdraws from the GPA. The requirement to deposit an instrument of accession and the 30-day time period described above will apply to parties intending to accede to the GPA. Withdrawals from the GPA take place either 60 days after the withdrawing party has notified the WTO Director-General of its withdrawal from the GPA, or immediately if the party also withdraws from the WTO.
- Subsection (2)(c) provides that regulations made under subsection (1)(b)(iii) and subsection (1)(b)(iv) may not come into force before modifications to other parties’ Appendix I to the GPA or the modifications to the UK’s Annex 1 list of central government entities to the GPA or become effective. This reflects the fact that, under Article XIX:5 of the GPA, modifications made by parties to its schedules become effective only where certain conditions are met.
- Regulations made under subsection (1)(b)(ii) are not subject to the limitations set out in section 1(2), since such regulations cannot be made until the UK has acceded to the GPA. This is because, as described below, the powers under subsection (1)(b)(ii) cannot be exercised until a dispute has arisen under the GPA between the UK and another GPA party.
- Section 1(3) establishes what sort of provision may be made by regulations under section 1(1). Regulations may modify retained direct principal EU legislation, as defined in the European Union (Withdrawal) Act 2018.
- Section 1(4) defines a “dispute” for the purposes of subsection (1)(b)(ii) as a matter that the UK or another party would be entitled to challenge under the WTO’s Dispute Settlement Understanding (“DSU”). Article XX of the GPA provides that, where a GPA party considers that its benefits under the GPA are being blocked or impaired by another GPA party, it may refer the matter for dispute settlement under the terms of the DSU.