Exclusions and (lack of) simplification in the Green Paper on procurement reform

Still in the context of the purported simplification objective set forth in the Green Paper onprocurement reform, I think it is important to look at what the Government is proposing in relation to exclusions.

Exclusions grounds in public procurement are nothing more than a compliance mechanism for the pursuance of objectives that have nothing to do with procurement itself. Like strategic or secondary objectives, they are an external policy objective that has been grafted into the procurement legislation.

Take for instance the absence of tax or social security debts. The relevance of these to determine the best offer to undertake a given contract is null. What they do is increase the cost for an undertaking for carrying such debts. In essence, they're an additional penalty that an undertaking faces for the debt that hopefully will give them the incentive to not incur on said debts in the first place.

The current EU-based ruleset on exclusions is indeed fairly cumbersome and longwinded but that is the price of harmonisation, inertia and entropy. Since doing this work is not free, there is a trade-off in forcing every single public procurement procedure to include an assessment of these grounds even if only the purported winner. It is just that at this moment in time we are not counting that cost or assessing the efficiency of using procurement as a means of enforcing the rules behind the exclusion grounds.

Outside the EU, the UK is indeed free to re-think the whole approach to exclusions and in effect this is an area where simplification was indeed achievable.

And what does the Green Paper purposes? More exclusions of course and zero proposals to reduce the workload associated with checking exclusion grounds. In consequence, it increases net complexity for the system.

That is a critical shortcoming of the Green Paper and one that could be solved differently. My view is that we should have only mandatory exclusions and those need to be automated.

If the wider policy objective behind an exclusion really requires the use of procurement as a means of enforcing it, then the exclusion should be mandatory. Discretionary exclusion grounds are half-way houses created by the legislator who just push the responsibility of analysis down to the contracting authorities, increasing the complexity of their work.

Once we have a system of only mandatory exclusions where discretion is taken out of the equation, then we can work on automating decisions, transforming them from mandatory into automatic. That is, we need to move to a system whereby the information contained in public bodies silos is shared *automatically* so that a query can be run on a database and a pass/fail answer is given. That doesn't mean we would be able to automate every single ground but it would be reduce the work for contracting authorities where possible. Of course this implies a much wider intervention in the way central government works than a mere procurement reform, but hey isn't the Government interested in using procurement to unleash innovation?

The Government should also be prepared to internalise the costs of this approach in its proposed central platform so that instead of pushing the cost and complexity down to "commercial teams" it deals instead with the administrative, menial and non-commercial aspects of procurement to the maximum extent possible. Since the rules behind exclusion grounds are not intrinsic to the procurement itself, it makes sense that the cost (and risk) associated with them sits with the body wishing to see them enforced via procurement.

Once this cost is borne by the beneficiary of the enforcement, its incentive will be to minimise it and increase the efficiency associated with it. As such, it is much more likely to actually spur innovation in the sense of, for example, automating those decisions to the extent possible.

With this in mind, it is self-evident that the management of a debarment list and self-cleaning assessment need to be done centrally by a body set up to that exclusive effect, and any issues of unlawful exclusions are moved away from the procurement procedure itself. You could even associate that database to the electronic platforms and simply bar any undertaking that does not meet the exclusion criteria. Yes, this is complex but for the most part it just brings to the surface the complexity that is now externalised into contracting authority.

For undertakings Government should also automate their work instead of (once more) requesting them to manually upload information and keeping it updated over time. This is a menial job and one that needs to be done away with to the extent possible so that the transaction and opportunity costs to participation in public procurement can really be brought down.

Next up: the wider objectives proposed by the Green Paper.