Some thoughts about exclusions in the draft Procurement Bill
I am yet to really get my teeth into the Procurement Bill laid before Parliament a couple of weeks ago, but have had a chance to look into exclusions and just those few articles warrant a blogpost by themselves. It is fair to say I am not a fan of exclusions in general and find the EU approach for them quite lacking, but the Bill's version is on a league of its own. So much for 'simplifying procurement'…
The Proposed Bill has adopted a fairly complex way of dealing with exclusions. On the one hand, at face value, it maintains the distinction between mandatory and discretionary exclusions. On the other hand, it bolts in a fairly complex debarment system which, by itself, deserves its own separate post. So for this one I will be focusing on ss 54-55 which focus on the mechanics of exclusions. The grounds themselves have been thrown to Schedules 6 and 7.
As mentioned above, ss 54 keeps the distinction of mandatory and discretionary exclusions, with the first being dealt in (1) and the second in (2). But that is where the similarities with the PCR 2015 end. The subjects of mandatory exclusions are now called 'excluded suppliers' and those of discretionary exclusions are 'excludable' suppliers. As we will see the expression 'excluded suppliers' is a misnomer.
According to ss 54(1), a supplier is considered an excluded supplier if a mandatory exclusion ground has been observed by the contracting authority *and* the contracting authority considers such grounds are likely to occur again. In addition, a supplier included in the debarment list for a mandatory exclusion ground will also be considered an excluded supplier but without the contracting authority having any discretion on the assessment of the underlying conditions. The same conditions are applicable to excludable suppliers as well.
The choice of words above is particularly problematic since the fulfilment of the likelihood to occur again is to be done in accordance with ss 55, in particular (1). As per this section, the contracting authority 'may have regard' to a number of elements to conclude if the exclusion should be enforced or not. It is fair to say these constitute a more structured approach to self-cleaning (which in of itself is a problematic concept, more so when to be assessed on a case-by-case approach) but the effect this approach will have is to make what was mandatory, effectively optional. This is evident once one looks at what elements the contracting authority should give regard to. If paras (a) and (b) of ss 55(1) appear to be in line with the traditional approach taken on self-cleaning, (c) (d) and (e) tell a very different story by significantly opening up the scope for 'self-cleaning' to the point of a mere commitment that self-cleaning steps will be taken in the future is enough or that enough time from the original set of circumstances has elapsed. As if that was not enough, the final possibility included in Bill is that the contracting authority may give regard to to 'any other evidence, explanation or factor' it considers appropriate, effectively throwing fully open the gates of self-cleaning.
Despite my reservations on exclusions overall, the effect of this drafting is obvious: it makes all grounds optional since no contracting authority will dare to classify any supplier as 'excluded' or even 'excludable' if it mounts even a modicum of defence since before any decision is made the contracting authority has to give the supplier a reasonable opportunity to provide evidence including if 'the circumstances giving rise to any application are likely to occur again' effectively prompting the mounting of the defence mentioned.
By default there is no real incentive for the contracting authority to exclude a supplier since it reduces competition and generates a certain cost as well as increasing the risk of legal challenges from any aggrieved supplier. Once we add the specificities of the new exclusion regime we will end up with barely any exclusions in practice. This is problematic since concluding the exclusion grounds apply to a given supplier by a contracting authority is one of the ways the investigation leading to the inclusion on the debarment list can generate evidence for that process.