Consultancy firm’s ban on bidding for government contracts is lifted

Cabinet Office accused of "cop-out" over U-turn
Bain's US headquarters. Photo: Kristina Blokhin/Alamy

By Tevye Markson

23 Mar 2023

A major consultancy firm’s three-year ban on bidding for government contracts has been lifted after less than eight months.

In August, Jacob Rees-Mogg, the Cabinet Office minister at the time, gave Bain & Company, one of the “big three” consultancy groups, a three-year ban from bidding for government work in light of its role in a major South Africa corruption scandal.

In a U-turn, new Cabinet Office minister Jeremy Quin announced this week that only the South African arm of Bain will remain excluded from bidding for UK government business. He said this was due to the progress the company has made since August.

“Following robust and intensive dialogue with Bain & Company since the exclusion decision was made in August, which has received the full cooperation from the company, we have concluded that Bain & Company, Inc. and its affiliates outside of South Africa…can bid for UK government work,” Quin said in a ministerial statement.

Quin said this includes both Bain & Co UK and BuyingTeam Limited (which trades as Proxima).

The minister said the Cabinet Office has received full cooperation from the company, which has “produced detailed evidence of the measures they have taken internally – including related to the way Bain & Company handles bids for UK government work – which was not available to the Cabinet Office previously”.

The decision to lift the ban is subject to a regular and thorough period of close monitoring, for a minimum of two years, “so we can be satisfied that the company continues to uphold the measures they have now put in place”, Quin said.

During this monitoring period, Bain has agreed that it will continue to provide evidence to the Cabinet Office that its governance, organisation and internal processes are now working, the minister added.

Quin said Bain has “welcomed this robust external challenge, to help ensure that going forward their governance is of a consistently high standard, that the self-cleansing actions put in place are operational and that any new issues arising are being managed and communicated transparently”.

A spokesperson for Bain said: “We welcome the decision to reinstate Bain & Company as a trusted supplier to the UK government.”

In his ministerial announcement, Quin also warned bidders, adding: “We strongly condemn corporate malpractice and will not hesitate to exclude suppliers should they be found to not be upholding the highest standards.”

Bain & Co South Africa remains excluded from bidding for UK government procurements until 4 January 2025. Quin said Bain has apologised for the fact that its South African contributed to damaging a critical public institution in South Africa and acknowledged that its cooperation with investigating authorities fell short.

A South African inquiry last year found Bain acted "unlawfully" and, along with other private sector companies, colluded in "the clearest example of state capture".

The South African government joined the UK in banning the company from bidding for contracts in September, but with a stronger 10-year prohibition.

UK government accused of 'cop-out'

Peter Hain, a Labour peer and veteran anti-apartheid campaigner, said the UK government's U-turn was a "very disappointing".

The former cabinet minister told South Africa’s Radio 702: “It’s a complete cop-out because Bain have not fundamentally changed anything.”

Hain, who said he visited Rees-Mogg to persuade him to ban Bain in August, said the government has “obviously given in to a lot of fine words and soft soaping”.

In a statement following the UK government's decision, Bain & Co South Africa's managing partner Stephen York said the firm had "made mistakes" but "there is no evidence that Bain colluded with SARS or engaged in any corrupt and fraudulent practices".

Hain argued these were not mistakes but a deliberate effort to undermine one of the key institutions in South Africa that should be punished.

“That's not just reprehensible, it deserves to be punished, which has worked for a brief period,” he said. The British government to its credit did and has now flipped on its head and withdrawn that."

Hain said Bain should "feel the pain" for actions that "have damaged the whole fabric of the country in South Africa".

Bain & Co South Africa's York said the business' ongoing exclusion from biddig for UK contracts was "regrettable" but "a decision that we will respect".

He said the new Bain South Africa leadership was "confident that the comprehensive actions taken by the firm locally and globally will ensure that we never repeat our past mistakes – in South Africa or elsewhere".

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