Brexit: Firms get creative with their strategies to overcome uncertainty

Toblerones are smaller in size, Walker and Nescafé have increased their prices, and a third of UK businesses are drawing up plans to avoid post-Brexit tariffs. Brexit is a common concern in the procurement market, and although it is uncertain exactly how supply chains, contracts and the legal system will be affected, organisations are not wasting time in their preparations.

In the coming months and years the business environment may be difficult, with uncertainty on the cards for most businesses. In order to prepare, organisations are looking towards:

Renegotiation of contracts
Alternative supply chains and routes to market
Increasing prices — or in the case of Toblerone and Maltesers, reducing product sizes (unfortunately!)

Tendering for public sector contracts

Since the Brexit result, there has actually been an increase in the number of contract notices released in the UK, as authorities push forward in their procurement of goods and services. Organisations may be unsure whether to tender for public sector work in the current environment, but at the moment the Government is still under pressure to obtain high quality suppliers at a good price and it is hoped this will remain the priority amidst Brexit.

However, there have also been a number of contracts extended or re-tendered in a bid to delay the tendering process until buyers are certain of the external environment, and so as not to put added pressure onto the civil servant workload.

It is still uncertain whether the EU procurement regulations will stay in place following Brexit, but there will always be the need to evaluate and select the most economically advantageous suppliers to provide the public sector goods and services, leading us to believe a version of the PQQ and tender process will certainly remain.

What will it mean for TUPE?

Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) was introduced to preserve an employee’s terms and conditions when a business was transferred to a new employer. This may be a merger, takeover or outsourcing. TUPE stemmed from the European Union, and is therefore another regulation that may be up for review or renegotiation during Brexit.

Whether TUPE applies within a contract is a determining factor for a company bidding, and can either deter or encourage a company in their bidding decision. Following Brexit, if TUPE regulations are reviewed, it is likely a more extensive consultation around TUPE transfers will be introduced.

Specialist advice will certainly be needed for TUPE, other legal matters and contract issues as Brexit moves forward.

If you require any assistance navigating through the public sector procurement process, visit our resources page or contact our team directly who will be happy to help.