Companies that fail to deliver could be banned from winning public contracts

Cabinet Office unveils plans for ‘simpler, clearer and more flexible’ procurement rules
Photo: Howard Lake/Flickr/CC BY-SA 2.0

By Tevye Markson

07 Dec 2021

Companies with a track record of poor delivery, fraud or corruption could be blocked from winning public contracts under plans to toughen up procurement rules.

The Cabinet Office announced plans to introduce new powers today which will allow it to exclude suppliers from winning public contracts if they have previously not delivered projects on time or on budget or have acted unethically.

The reforms will see hundreds of “complicated and bureaucratic” European Union procurement rules torn up, with “simpler, clearer and more flexible rules put in place”, the department said. 

Suppliers can also be banned if they have engaged in unethical practices, such as a lax approach to safety, or if there are national security or environmental concerns.

Under the current rules, suppliers can only be excluded from winning new government contracts if there has been a significant breach of contract.

Details of the exclusions framework have been published as part of a government response to a consultation on its procurement green paper.

The consultation, which ran from last December to March, sought feedback on a number of proposals intended to speed up and simplify tendering processes, ensure contracts provide value for money and make procurement more accessible to small business, charities and social enterprises.

Today’s publication reveals many of the respondents found the existing regulations unclear and confusing, highlighting uncertainty around:

●             The scope of some of the exclusion grounds

●             The individuals and entities covered by the regime

●             The process to be followed to verify self-declarations

●             The purpose of self-cleaning

All consulted stakeholders raised concerns, but contracting authorities, who have responsibility for considering the exclusion of suppliers from procurements on a case-by-case basis, were particularly worried.

The new exclusions framework was published in response to the feedback and aims to simplify the regulations while focusing on excluding suppliers who “pose an unacceptable risk” to effective competition for contracts, reliable delivery, the public, the environment, public funds, national security interests or the rights of employees.

The new legislation is unlikely to come into force until 2023 at the earliest.

Increasing transparency

The green paper also includes plans to make public contracts more transparent. These plans were supported by more than 90% of respondents, although some raised concerns around the parameters of transparency and the potential burden it could place on contracting authorities, which they said could slow down processes and decision making.

In response, the government said it will ensure the transparency requirements are proportionate to the procurements being carried out and are simple to implement.

Cabinet Office minister Steve Barclay said: “Leaving the EU gives us the perfect chance to make our own rules for how the government’s purchasing power can be used to promote strong values.

“While doing so we’re increasing transparency and ensuring that procurement remains fair and open.

He said the “simpler and more flexible rules” would also make it easier for small businesses to win work.

Helping small businesses get better access to government contracts

The government has also published new guidance which aims to help smaller businesses get better access to the £50bn worth of public contracts tendered each year.

The Selling To Government Guide aims to give small and medium-sized enterprises a better understanding on how to bid for and win government contracts, and includes tips on how to demonstrate social value.

The guidance follows on from new measures introduced in January which mean, as well as assessing value for money, departments must consider social value when assessing contract bids.

With about £300bn spent every year on public projects such as the delivery of new schools, hospitals and roads, public procurement makes up about a third of all public expenditure.

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