Guidance

Annex D - Exclusion Grounds: Public Procurement (HTML)

Published 27 March 2024

Mandatory Exclusion Grounds

Listed in Public Contract Regulations 2015 (as amended) R57(1), (2) and (3) and the Public Contract Directives 2014/24/EU Article 57(1).

Participation in a criminal organisation

• Participation offence as defined by section 45 of the Serious Crime Act 2015
• Conspiracy within the meaning of:
  • section 1 or 1A of the Criminal Law Act 1977; or
  • article 9 or 9A of the Criminal Attempts and Conspiracy (Northern Ireland) Order 1983,

where that conspiracy relates to participation in a criminal organisation as defined in Article 2 of Council Framework Decision 2008/841/JHA on the fight against organised crime.

Corruption

• Corruption within the meaning of section 1(2) of the Public Bodies Corrupt Practices Act 1889 or section 1 of the Prevention of Corruption Act 1906;
• The common law offence of bribery;
• Bribery within the meaning of sections 1, 2 or 6 of the Bribery Act 2010, or section 113 of the Representation of the People Act 1983.

Terrorist offences or offences linked to terrorist activities

• Any offence:
  • listed in section 41 of the Counter Terrorism Act 2008;
  • listed in schedule 2 to that Act where the court has determined that there is a terrorist connection;
  • under sections 44 to 46 of the Serious Crime Act 2007 which relates to an offence covered by the previous two points.

Money laundering or terrorist financing

• Money laundering within the meaning of sections 340(11) and 415 of the Proceeds of Crime Act 2002
• An offence in connection with the proceeds of criminal conduct within the meaning of section 93A, 93B or 93C of the Criminal Justice Act 1988 or article 45, 46 or 47 of the Proceeds of Crime (Northern Ireland) Order 1996.

Child labour and other forms of trafficking human beings

• An offence under section 4 of the Asylum and Immigration (Treatment of Claimants etc.) Act 2004;
• An offence under section 59A of the Sexual Offences Act 2003
• An offence under section 71 of the Coroners and Justice Act 2009;
• An offence in connection with the proceeds of drug trafficking within the meaning of section 49, 50 or 51 of the Drug Trafficking Act 1994
• An offence under section 1, 2 or section 4 of the Modern Slavery Act 2015.

Non-payment of tax and social security contributions

• Breach of obligations relating to the payment of taxes or social security contributions that has been established by a judicial or administrative decision.
• Where any tax returns submitted on or after 1 October 2012 have been found to be incorrect as a result of:
  • HMRC successfully challenging the potential supplier under the General Anti – Abuse Rule (GAAR) or the “Halifax” abuse principle; or
  • a tax authority in a jurisdiction in which the potential supplier is established successfully challenging it under any tax rules or legislation that have an effect equivalent or similar to the GAAR or “Halifax” abuse principle;
  • a failure to notify, or failure of an avoidance scheme which the supplier is or was involved in, under the Disclosure of Tax Avoidance Scheme rules (DOTAS) or any equivalent or similar regime in a jurisdiction in which the supplier is established.

Other offences

• Any other offence within the meaning of Article 57(1) of the Directive as defined by the law of any jurisdiction outside England, Wales and Northern Ireland.
• Any other offence within the meaning of Article 57(1) of the Directive created after 26th February 2015 in England, Wales or Northern Ireland.

Discretionary Exclusions Grounds

Listed in Public Contract Regulations 2015 (as amended) R57(8) and the Public Contract Directives 2014/24/EU Article 57(4).

Obligations in the field of environment, social and labour law.

• Where an organisation has violated applicable obligations in the fields of environmental, social and labour law established by EU law, national law, collective agreements or by the international environmental, social and labour law provisions listed in Annex X to the Directive (see copy below) as amended from time to time; including, but not limited to, the following:-
  • In the last 3 years, where the organisation or any of its Directors or Executive Officers has been in receipt of enforcement/remedial orders in relation to the Health and Safety Executive (or equivalent body).
  • In the last three years, where the organisation has had a complaint upheld following an investigation by the Equality and Human Rights Commission or its predecessors (or a comparable body in any jurisdiction other than the UK), on grounds of alleged unlawful discrimination.
  • In the last three years, where the organisation has been convicted of a breach of the Health and Safety legislation.
  • In the last three years, where any finding of unlawful discrimination has been made against the organisation by an Employment Tribunal, an Employment Appeal Tribunal or any other court (or incomparable proceedings in any jurisdiction other than the UK).
  • Where the organisation has been in breach of section 15 of the Immigration, Asylum, and Nationality Act 2006;
  • Where the organisation has a conviction under section 21 of the Immigration, Asylum, and Nationality Act 2006;
  • Where the organisation has been in breach of the National Minimum Wage Act 1998.

Bankruptcy, insolvency

• Bankrupt or is the subject of insolvency or winding-up proceedings, where the organisation’s assets are being administered by a liquidator or by the court, where it is in an arrangement with creditors, where its business activities are suspended or it is in any analogous situation arising from a similar procedure under the laws and regulations of any State.

Grave professional misconduct

• Guilty of grave professional misconduct

Distortion of competition

• Entered into agreements with other economic operators aimed at distorting competition.

Conflict of interest

• Aware of any conflict of interest within the meaning of regulation 24 due to the participation in the procurement procedure

Been involved in the preparation of the procurement procedure.

• Advised the contracting authority or contracting entity or otherwise been involved in the preparation of the procurement procedure.

Prior performance issues

• Shown significant or persistent deficiencies in the performance of a substantive requirement under a prior public contract, a prior contract with a contracting entity, or a prior concession contract, which led to early termination of that prior contract, damages or other comparable sanctions.

Misrepresentation and undue influence

• The organisation has influenced the decision-making process of the contracting authority to obtain confidential information that may confer upon the organisation undue advantages in the procurement procedure, or negligently provided misleading information that may have a material influence on decisions concerning exclusion, selection or award, or withheld such information or is not able to submit supporting documents required under regulation 59.

Breach of obligations relating to the payment of taxes or social security contributions.

• The contracting authority reserves the right to use its discretion to exclude a potential supplier where it can demonstrate by any appropriate means that the potential supplier is in breach of its obligations relating to the non-payment of taxes or social security contributions.

Additional grounds

ANNEX X Extract from Public Procurement Directive 2014/24/EU

LIST OF INTERNATIONAL SOCIAL AND ENVIRONMENTAL CONVENTIONS REFERRED TO IN ARTICLE 18(2) —

• ILO Convention 87 on Freedom of Association and the Protection of the Right to Organise;
• ILO Convention 98 on the Right to Organise and Collective Bargaining;
• ILO Convention 29 on Forced Labour;
• ILO Convention 105 on the Abolition of Forced Labour;
• ILO Convention 138 on Minimum Age;
• ILO Convention 111 on Discrimination (Employment and Occupation);
• ILO Convention 100 on Equal Remuneration;
• ILO Convention 182 on Worst Forms of Child Labour;
• Vienna Convention for the protection of the Ozone Layer and its Montreal Protocol on substances that deplete the Ozone Layer;
• Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal (Basel Convention);
• Stockholm Convention on Persistent Organic Pollutants (Stockholm POPs Convention)
• Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade (UNEP/FAO) (The PIC Convention) Rotterdam, 10 September 1998, and its 3 regional Protocols.

Consequences of misrepresentation

A serious misrepresentation which induces a contracting authority to enter into a contract may have the following consequences for the signatory that made the misrepresentation:-

• The potential supplier may be excluded from bidding for contracts for three years, under regulation 57(8)(h)(i) of the PCR 2015;
• The contracting authority may sue the supplier for damages and may rescind the contract under the Misrepresentation Act 1967.
• If fraud, or fraudulent intent, can be proved, the potential supplier or the responsible officers of the potential supplier may be prosecuted and convicted of the offence of fraud by false representation under s.2 of the Fraud Act 2006, which can carry a sentence of up to 10 years or a fine (or both).
• If there is a conviction, then the company must be excluded from procurement for five years under reg. 57(1) of the PCR (subject to self-cleaning).