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Procurement in a Nutshell – Grounds for Exclusion and the Debarment List

The Government published its Green Paper "Transforming Public Procurement" on 15 December 2020, with its aim to provide a modern, fit for purpose set of rules, improving and simplifying the procurement process.

In December 2021 the Government published its response to the consultation and the comments raised by over 600 organisations and individuals. As a result we now have a clearer indication of the reforms that the Government intends to introduce.

The Government plans to produce a draft Bill at some point in 2022. Further to the new legislation the Government will also introduce new secondary legislation or regulations to implement the new regime and produce  “a detailed and comprehensive package of published resources (statutory and non-statutory guidance on the key elements of the regulatory framework, templates, model procedures and case studies)” to help contracting authorities and suppliers understand how the new regime will work.

Due to significant changes and the amount of work required to bring this all into effect it is unlikely that the new regime will be implemented until 2023 at the earliest. We can expect a draft Bill this year and the Government has said that it intends to give at least 6 months’ notice of “go-live”.

What this Nutshell covers

This Nutshell looks at the proposals for exclusions, both mandatory and discretionary, and for developing a debarment list of suppliers.

What the Green Paper said

The current regulations provide for the exclusion of named suppliers on both mandatory and discretionary grounds. The Government proposes to amend these including to make some of them more explicit. Primarily they propose to introduce a mandatory exclusion ground for offences relating to fraud against UK financial interests where there has been a criminal conviction. Further proposals for amendments to the current mandatory and discretionary exclusion grounds will include:

  • Mandatory exclusion for non-disclosure of beneficial ownership
  • Mandatory exclusion where a beneficial owner has been convicted of fraud against UK financial interests
  • A mix of mandatory and discretionary exclusion for non-payment of taxes and for tax evasion
  • Discretionary exclusion for a deferred prosecution agreement (DPA)

Suppliers would have the opportunity to self-clean which would shorten the term of the exclusion.

Further, the government posed its intention to explore introducing a centrally managed debarment list. This list would reduce the need for individual contracting authorities to assess suppliers. The debarment list would include all mandatory exclusions and possibly some discretionary grounds. This would complement the contracting authority’s own assessment of discretionary grounds.

Results of the Consultation

Feedback from respondents was generally positive. The comments highlighted that the current rules could be difficult to interpret and this has led the Government to propose both a look at the legal provisions around exclusions and a new framework which will make the rules clearer. In particular this would cover the grounds for discretionary exclusion and the criteria for self-cleaning. Respondents had been asked to suggest other criteria for exclusion, and a number of suggestions were put forward including modern slavery and environmental misconduct.

There was strong support for the proposal to exclude suppliers whose beneficial owner had been convicted, based on belief that this would improve standards in public procurement, although some concerns were raised about how to identify ‘beneficial ownership’.

There were concerns raised regarding the exclusions for tax evasion, in that it was not a contracting authority’s duty to enforce tax compliance, and that exclusion could be disproportionate. Equally, there was concern that exclusions on these grounds could create legal challenges unless guidance was specific and clear.

The proposals for exclusion for a DPA generated some convincing feedback that such a move would undermine the purpose of a DPA. Consequently the Government does not intend to take this forward.

The proposal for a debarment list was well received particularly by local authorities. It was felt that a central list would give consistency and ease the workload on contracting authorities. However, the importance of keeping it up to date was highlighted, and also the problems associated with trying to assess overseas suppliers on the same criteria as UK based suppliers.

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What this means

The Government intends to introduce the proposals for the grounds for exclusion. They have heard concerns about the need for explicit guidance, and will produce detailed guidance on self-declarations, supporting information and self-cleaning.

Likewise, the Government considers the proposals for a debarment list to be a strong part of the drive to improve the fraud prevention controls on public procurement, and they will consequently be introducing the measure. This is arguably a surprisingly controversial step, given that it entails an actual ban on certain companies bidding for public contracts. Further consultation on the process is expected and will provide interesting reading.

If you have any queries on the issues raised or on any aspect of procurement, please contact one of our procurement specialists via our procurement hotline on 0330 137 3451

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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Melanie Pears

Partner | Head of Public Sector

+44 (0) 330 137 3451

+44 (0)789 987 8424

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Tim Care

Partner | Public Sector

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+44 (0) 752 590 3378

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