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Procurement in a nutshell – conflicts of interest

In this Procurement in a Nutshell update, we will be looking at conflicts of interest under the Public Contracts Regulations 2015.

The regulations are available in full here.

What’s new?
Regulation 24 deals with conflicts of interest for the first time. Under this regulation:

  • Contracting Authorities (CAs) must take all appropriate measures to effectively prevent, identify and remedy any conflicts of interest that arise during the conduct of the procurement procedure so as to avoid any distortion to competition and to ensure equal treatment of all tenderers
  • Conflicts of interest are defined as a minimum to include any situation where “relevant staff members have, directly or indirectly, a financial, economic or other personal interest which might be perceived to compromise their impartiality and independence in the context of the procurement procedure”
  • “Relevant staff” will include all staff members of the CA or of a procurement service provider acting on behalf of the CA, who are involved in the conduct of the procurement procedure or may influence the outcome of that procedure.

In addition to regulation 24, CAs should be aware of additional provisions relating to conflicts of interest in other parts of the regulations, including:

  • Regulation 57(8)(e) lists conflicts of interest as a discretionary ground for exclusion where the conflict cannot be remedied by other, less intrusive, measures
  • Regulation 84 requires CAs to include in their written reports for Part 2 procurements information relating to any conflicts of interest arising and details of the measures they have taken in response
  • Regulation 41 sets specific rules for the treatment of tenderers who have been involved in pre-procurement market engagement or who have otherwise been involved in the preparation of the procurement procedure. CAs are obliged to take all appropriate measures to ensure that competition is not distorted by the tenderer’s involvement and they can be excluded where there is no other way to ensure equality of treatment.

Why is it important?
CAs must have clear and robust arrangements in place to deal with conflicts of interest. CAs would be well advised to check their current standing orders to ensure compliance with the new regulations.

There are a number of types of procurement and CA where having a clear conflict of interest policy is of particular importance.

This includes, for example, for any organisation running a procurement where it is anticipated that the CA might receive in-house bids. NHS organisations, such as CCGs, should be especially alive to these requirements as their members will often be involved in developing new care pathways and bidding for contracts arising out of these, giving rise to situations of potential conflict.

How can I find out more?
If you have any queries on the issues raised or on any aspect of procurement, please contact us via our procurement hotline on 0191 204 4464.

Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.

This page may contain links that direct you to third party websites. We have no control over and are not responsible for the content, use by you or availability of those third party websites, for any products or services you buy through those sites or for the treatment of any personal information you provide to the third party.

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