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Procurement in a nutshell – grounds for exclusion

In this Procurement in a Nutshell note we will be looking at the grounds for excluding tenderers open to Contracting Authorities (CAs) under the Public Contracts Regulations 2015 (PCRs 2015).

The full regulations are available here.

To save you time and to help all practitioners, each week we will issue succinct notes on key changes.

What’s New?
Similar to the Public Contracts Regulations 2006,  regulations 57 to 60 of the PCRs 2015 set out mandatory and discretionary grounds for excluding tenderers from participating in a public procurement procedure.

Mandatory exclusions include:

  • where specified offences have been committed including corruption, bribery, money laundering, certain types of fraud and theft and drug trafficking; and
  • in certain circumstances, for non-payment of tax or social security contributions by the tenderer.

These exclusions run for 5 years from date of conviction.

Discretionary exclusions include:

  • in the case of bankruptcy,  insolvency, winding up procedures etc;
  • where the tenderer is guilty of grave professional misconduct;
  • where the CA has plausible indications that the tenderer has entered into agreements to distort competition;
  • where a conflict of interest and/or prior involvement of a tenderer during pre-procurement market engagement cannot be effectively remedied by other, less intrusive measures;
  • where the tenderer is guilty of misrepresenting or failing to supply information- required for the verification of the absence of grounds for exclusion / fulfilment of the selection criteria; and
  • where the tenderer has tried to unduly influence the CA, to obtain confidential information about the procurement or has negligently provided misleading information which may have a material influence on the CA’s decision making.

New discretionary exclusions introduced by the PCRs 2015 include:

  • non-compliance of tenderer with environmental / social / labour laws;
  • where the tenderer has shown significant or persistent deficiencies in performance of substantive requirement under a prior public contract which led to termination / damages / comparable sanctions.

Discretionary exclusions run from 3 years from date of relevant event.

Why is it important?
The Public Contracts Regulations 2006 included both mandatory and discretionary grounds for excluding tenderers but the PCRs 2015 reviews and adds in new and additional grounds for exclusion which CAs should be aware of.

CAs will need to familiarise themselves with the revised exclusions which have been expanded (such as the addition of extra types of offence) and consider the categorisation of certain grounds as mandatory or discretionary.

With regard to the entirely new grounds, of particular interest to CAs will be the ability of a CA to exclude a tenderer due to past poor performance.

This will be useful for CAs who have had or know of other CAs who have previously suffered difficulties with contractor performance following previous procurements, although the threshold for this is set reasonably high in that the performance must have attracted a sanction.

Additionally, CAs can now consider whether to exclude tenderers for non-compliance with environmental / social / labour laws, broadening the scope of their powers.

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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