Isme hits out at Brexit-proof clause in State procurement contract

A lobby group representing small businesses has hit out out at the State’s procurement office for attempting to pass on the risk of a no-deal Brexit.

Isme said it would be "reprehensible" for any State agency or local authority to try to "force" Brexit risks on to small business given "the Government doesn't know them itself".

“We’re saying that if the might of Government doesn’t know what’s to happen in Brexit, don’t ask us to crystal ball it for you,” Neil McDonnell, the group’s chief executive, said.

The issue arose after a contract from Leitrim County Council for a quotation to fit out vehicles with fire service equipment included a Brexit-proofing clause. The clause effectively said that the tender winner would have to fulfil their obligations under the contract, notwithstanding regulatory or taxation changes that arise following the UK's departure from the EU.

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“If a tendering authority is saying one of the outcomes of Brexit is that British standards are not recognised, then they should come right out and say it,” Mr McDonnell said.

Isme also questioned the enforceability of the clause, arguing that it falls foul of EU procurement law’s proportionality principle. This principle dictates that contractual requirements not be disproportionate or excessive.

The lobby group reiterated its call for enhanced powers for a body to perform an appellate function where cases like this arise.

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“It needs to have the powers to intervene and make findings against any body,” Isme said, adding that bad practice leads to poor value for money.

The call by Isme comes in a week when procurement practices are in the spotlight after professional services firm PwC reported a "series of weaknesses" in the State's approach to the construction of the National Children's Hospital.

Additionally, PwC singled out the role of quantity surveyors and criticised the lack of oversight of the project. It found the initiative was “driven by an imperative for timely completion, within a cost envelope that was never adequate to deliver the envisaged outcome and from a design that was continually evolving.”

The Office for Government Procurement (OGP) said that “there has been no change to public procurement rules arising from Brexit and no change to the standard procurement template documents issued by the OGP. The OGP is continuing to monitor the evolving situation but have not issued any guidance re template documents or contract clauses”.

The OGP said that the EU Commission has confirmed that the rules governing public procurement procedures will remain unchanged regardless of the outcome of the Brexit process, so suppliers will engage with procurement processes in a similar manner to the current regime.