Module 6: Supplier selection

Question 1

2.1  Information to be Submitted

Accepted Answer

Information about suppliers in an above threshold procurement process will no longer be captured using the Standard Selection Questionnaire (SQ) used under PCR 2015. The basic “mandatory” information for above threshold procurements will be captured using the Supplier Information System on the central digital platform, and the conditions of participation will be captured separately.

Supplier Information System (Central Digital Platform)	Conditions of Participation
• Basic supplier information (e.g.name, address, contract details, etc.) • Exclusion grounds • Some economic and financial standing information, such as audited accounts • Details of connected persons and beneficial ownership.	As discussed in Part 4 of this document, this will include information relating to conditions on a supplier’s legal and financial capacity, and technical ability, to perform the contract.

The central digital platform will be developed over time to include additional modules which will contain policy driven questions that are business and not procurement specific to further reduce duplication for contracting authorities and suppliers. Including additional modules on policy driven topics such as modern slavery, payment, carbon net zero and data protection.

Question 2

2.2  Supplier Information System and Procurements

Accepted Answer

Contracting authorities must ensure they use supplier information as provided via the central digital platform whenever a supplier applies to take part in, or submits a tender for, any above-threshold procurements. In the case of a direct award, a contracting authority will need supplier information from the central digital platform in order to complete relevant notices, and must ensure they are able to access supplier information before awarding the contract. This is not mandatory for below-threshold procurements, however, it is encouraged to save time, duplication and maximise the accuracy of information (although it’s important to note that contracting authorities must not set conditions of participation for below-threshold procurements).

The contracting authority must obtain confirmation from the supplier before awarding a contract that

the supplier has registered on the central digital platform,
the supplier has submitted any updated or corrected supplier information to the central digital platform
the supplier has shared any updated or corrected supplier information with the contracting authority

3. Grounds for Exclusion

The exclusions regime is designed to protect the public from the risks posed by suppliers who have been convicted of certain offences or misconduct, or who may be in circumstances not compatible with the delivery of public contracts. These include risks to:

Reliable delivery of public contracts.
Effective competition for public contracts.
Public confidence in the honesty, integrity and probity of suppliers.
Protection of public funds.
Protection of the public, the environment, national security interests and the rights of employees.

A supplier is an “excluded supplier”^{[footnote 1]} if a mandatory exclusion ground applies to the supplier or an associated person and the circumstances giving rise to that ground are continuing or likely to occur again, or if the supplier or an associated person is on the debarment list (see summary document 8:Remedies, Procurement Oversight and the Debarment List) on the basis of a mandatory exclusion ground Section 57(1).

A supplier is an “excludable supplier” if a discretionary exclusion ground applies to the supplier or an associated person and the circumstances giving rise to that ground are continuing or likely to occur again or if the supplier or an associated person is on the debarment list on the basis of a discretionary exclusion ground Section 57(2).

Exclusion is the ‘gateway’ that a supplier must get through in order to:

In the case of an open procedure: have their tender assessed.
In the case of a competitive flexible procedure: participate or progress in the procurement or have their tender assessed.
For direct awards: be awarded a contract.

3.1 Overview of Changes

Changes to the exclusions regime under the Procurement Act include:

New grounds for exclusion.
Strengthened and expanded grounds for exclusion.
Application of exclusion where an exclusion ground applies to a supplier’s “connected persons”, “associated persons” and other sub-contractors.
Gradual alignment of the period of time suppliers are subject to exclusion, increasing discretionary grounds to five years from when the contracting authority knew or ought to have been aware of it, matching mandatory grounds of five years from when the event occurred.
The creation of a debarment list, which is covered in Summary Document 8.

There are two types of exclusion grounds, set out in section 57:

Mandatory Exclusion grounds (Schedule 6): covering the most serious, high-risk scenarios.

Where a mandatory ground applies and the circumstances giving rise to that ground are continuing or are likely to occur again, or that supplier is on the debarment list for a mandatory ground, the supplier is considered to be an excluded supplier in relation to the procurement and may proceed no further.

Discretionary Exclusion grounds (Schedule 7): covering serious scenarios which may or may not merit exclusion depending on the circumstances. Where a discretionary ground applies and the circumstances giving rise to that ground are continuing or are likely to occur again, or that supplier is on the debarment list for a discretionary ground, the supplier is considered to be an excludable supplier and contracting authorities may choose, at their discretion, to exclude them from the procurement.

3.2 Changes to Exclusion Grounds

The key changes to the exclusion grounds, under the Procurement Act 2023, are:

Exclusion ground	Change
Mandatory exclusion grounds (Schedule 6)
Corporate manslaughter and corporate homicide	New
Theft, robbery, burglary, offences relating to stolen goods and certain other dishonesty offences	New
Blackmail, fraud and fraudulent trading	Extended
Labour market, slavery and human trafficking offences	Extended
Tax offences & misconduct in relation to tax	Extended
Cartel offences and competition law infringements	Extended
Failure to cooperate with debarment investigation	New
Threat to national security for particular types of contracts	New
Equivalents outside the UK	Extended
Ancillary offences (such as aiding and abetting)	Extended
Discretionary exclusion grounds (Schedule 7)
Labour market misconduct	New
Environmental misconduct	New
Poor performance	New
Threat to national security	New
Ancillary offences (such as aiding and abetting)	Extended

Terrorism, bribery, money laundering, certain slavery and trafficking offences and organised crime have been clarified but remain mandatory exclusion grounds. Insolvency and bankruptcy, potential competition infringements, professional misconduct, breach of contract and acting improperly in a procurement have been clarified but remain discretionary exclusion grounds.

Further detail on specific grounds are:

1. National Security

Under the Procurement Act 2023, contracting authorities have a discretion to exclude a supplier where the supplier (or associated person or connected person) poses a or there is a current threat to national security of the UK and where the circumstances giving rise to that situation are continuing or are likely to occur again. The supplier can only be excluded from a procurement on this ground where a Minister of the Crown agrees that the ground applies and that the supplier should be excluded. Contracting authorities are required to exclude a supplier from particular types of contracts where the supplier is on the debarment list on the basis that the supplier (or associated person or connected person) poses a threat to the national security of the UK and poses such a threat in relation to contracts of that description.

These two new national security grounds (one mandatory, and one discretionary) are included with the objective of protecting the UK’s national security interests.

The national security grounds provide a new lever to mitigate national security risks to the UK. Threat actors may wish to target the UK, including its critical infrastructure and services. These exclusion provisions provide a way of protecting the supply chain where the supply chain is the vector through which adversaries target the UK government.

The National Security Unit for Procurement (NSUP) has been established in the Cabinet Office to support coordination of national security assessments for exclusion and debarment decisions. NSUP will work across government, including with the national security community, to ensure ministerial decisions on exclusions and debarments are made with the most relevant and accurate information to hand. Contracting authorities will be able to refer cases to NSUP where they suspect a supplier poses a national security risk. Public guidance will be issued to support contracting authorities in understanding when referring a company to NSUP might be appropriate.

Mandatory ground (Schedule 6, paragraph 35) National security

This exclusion ground applies where a supplier has been put on the debarment list in relation to public contracts of a particular description where the supplier (or an associated person):

a. poses a threat to UK national security and

b. poses a threat to the delivery of contracts of a particular description, which may include:

The goods, works or services being supplied (e.g. software, communications equipment, data services).
The location of contract delivery or supply (e.g. for sensitive sites or critical national infrastructure).
The contracting authority in question (where the risk is particularly acute for a specific organisation)

This mandatory ground differs from the others under schedule 6 in that it can only be used by contracting authorities when the supplier concerned is on the debarment list for this ground. Where the exclusion ground applies, Ministers will have the power to place a supplier on a debarment list, following an assessment, on this national security ground. The supplier will usually remain on the debarment list for 5 years unless the supplier has been able to demonstrate that they have ‘self-cleaned’ with evidence the Minister agrees is sufficient to demonstrate that the circumstances giving rise to the ground is no longer continuing or is not likely to recur, or with evidence the Minister agrees that the ground no longer applies. Contracting authorities then must exclude that supplier from a covered procurement for contracts of the description specified in the debarment list. For other types of contracts, then there is no obligation to exclude the supplier (although contracting authorities will have a discretion to exclude on the basis of the discretionary exclusion ground as that will apply to any supplier on the debarment list on this basis).

Scenario 1:

A central government department is undertaking a procurement for supplying stationery. They receive a tender from Supplier A, who are on the debarment list under the mandatory national security ground with respect to contracts for digitisation and digital storage of sensitive information. Because the procurement in question relates only to the supply of stationery, with no sensitive information being handled by Supplier A, they are not an excluded supplier on this basis for this procurement.

Scenario 2:

A police force is procuring new wireless video and radio communication equipment for their officers. They receive a tender from Supplier B, who are on the debarment list for under the mandatory national security ground with respect to contracts for the provision of electronic communications equipment used in secure environments. Because the procurement in question is for electronic communication equipment which will be used within a secure environment, Supplier B is an excluded supplier for this procurement.

The investigation process for debarment for the UK Government will be managed by the newly established National Security Unit for Procurement (NSUP) - more information can be found in Summary Document 8 - Remedies, Procurement Oversight and the Debarment List.

A contracting authority excluding a supplier on this ground must follow the Ministerial notification process set out by NSUP (and/or the Welsh Ministers or Northern Ireland department department if the contracting authority is a devolved Welsh authority or a transferred Northern Ireland authority).

Discretionary ground (Schedule 7, paragraph 14 & Section 29)

A discretionary exclusion ground applies to a supplier if the contracting authority determines that the supplier (or an associated person or a connected person) poses a threat to the national security of the United Kingdom. This applies to all covered procurement (i.e. above threshold and not exempt). However, contracting authorities must seek Ministerial approval before excluding the supplier on this ground. As with all exclusions, they must also notify the relevant Minister of the Crown, or the Northern Ireland or Welsh ministers where applicable when they exclude. Further guidance will be provided by the National Security Unit for Procurement on the steps contracting authorities should take.

Suppliers may have already been put on the debarment list on this discretionary ground, or on the mandatory ground previously described. If this is the case, they will appear on the debarment list. If the supplier is on the debarment list on the discretionary ground, then contracting authorities may consider the details of that debarment investigation to determine whether or not to exclude them from their procurement. The same applies for private utilities, irrespective of whether the mandatory or discretionary ground applies, as all exclusion grounds are discretionary for private utilities. Further guidance will be provided.

2. Breach of Contract & Poor Performance (Schedule 7(12)

The discretionary exclusion ground relating to poor performance in PCR 2015 only covered ‘significant or persistent deficiencies’ in contract performance, where they led to early termination, damages or comparable sanctions. Such poor performance was not always visible to the marketplace and therefore it was difficult for contracting authorities to exclude suppliers on this basis.

The Procurement Act 2023 has made breach of contract and poor performance more visible by the requirement to publish contract performance notices in particular circumstances. This will support contracting authorities exercising the new exclusion grounds. These have been extended to cover sufficiently serious breaches (where the breach results in termination, damages or settlement) and, importantly, to also cover where a supplier:

(a) has not performed a relevant contract to a relevant authority’s satisfaction,

(b) was given proper opportunity to improve performance, and

(c) failed to do so.

A separate ground applies if a contracting authority has published information under section 71(5) in respect of breach or poor performance.

This means that contracting authorities now have the discretion to exclude suppliers where it can be demonstrated that they have not performed one or more contracts to a satisfactory level, and have failed to improve that failure. A supplier may be given proper opportunity to improve performance by way of contractual measures put in place by the contracting authority, for example, notification of poor performance and clear time periods to rectify, rectification plans or improvement plans. Contracts should also include clear performance requirements, by way of a clear specification and other performance requirements, and clear thresholds for when performance is not satisfactory, such as thresholds for failure to comply with particular KPIs over a set period.

Section 71(5) relates to a new requirement for contracting authorities to publish, on the central digital platform, a contract performance notice in the event of supplier breach or poor performance, as detailed above. Further details about this notice are provided in Summary Document 9: Contract Governance.

This is a ground for discretionary exclusion in itself but the data contained within the notice can also provide a useful source of information about the breach or poor performance to help contracting authorities in exercising their discretion to decide whether or not a supplier is to be excluded. Information should be treated proportionately, and steps taken to acquire further details, if required, as part of the due diligence process, should also be proportionate.

3. Modern Slavery

Labour market, slavery and human trafficking offences, Schedule 6 (19-26)

The PCR 2015 included mandatory exclusion grounds for certain offences under the Modern Slavery Act 2015. These grounds covered certain slavery and human trafficking offences only.

The Procurement Act 2023 has:

Extended the types of offences (under a wider range of legislation) as mandatory exclusion grounds for labour market, slavery and human trafficking offences: specifically an offence under section 30 of the Modern Slavery Act 2015 for breach of certain orders made under that Act
Included, in addition to slavery and human trafficking, offences of breach of labour market enforcement orders, refusal or wilful neglect to pay national minimum wage and offences relating to gangmasters.
Included a new discretionary ground covering labour market misconduct: specifically where certain slavery, trafficking, exploitation or labour market orders have been made or where there is sufficient evidence of labour market, slavery or human trafficking offences but no conviction.

In addition, across many exclusion grounds - including modern slavery grounds - the Act has made the grounds more specific and easier to assess by making it clearer which UK laws are associated with each ground.

4. Tax Offences (Schedule 6, paragraphs 29-31)

The PCR 2015 included one mandatory and one discretionary exclusion ground relating to the non-payment of taxes. To reflect the seriousness of these matters, the Act has included three mandatory grounds for tax offences (schedule 6, paragraphs 29-31) and five mandatory grounds for misconduct in relation to tax (schedule 6, paragraphs 36-40) which:

Listed specific tax-related offences as mandatory exclusion grounds: cheating the public revenue, fraudulent evasion of certain taxes and failure to prevent facilitation of tax evasion.
Ensuring the mandatory exclusion grounds apply where such relevant tax-related offences have been committed irrespective of whether the supplier has repaid or committed to repay the tax.
Broaden and clarify the range of situations covered under the discretionary exclusion grounds for tax misconduct, including stating which penalties and HMRC findings are grounds, to cover more areas of misconduct.

5. Overseas Misconduct

Equivalents outside the United Kingdom (Schedule 6, paragraphs 34 and 42)

The Act now also clarifies and strengthens provisions for offences and misconduct that are committed overseas.

There are now specific mandatory exclusion grounds where the supplier

Is convicted under a non-UK law of an offence that would be an offence in the UK if it had been committed in the UK.
Has been subject to a tax-related penalty or decision by a non-UK regulator, court or authority that would give rise to a penalty or decision in the UK if it had been committed in the UK, or has had a tax advantage outside the UK that would have resulted in a tax defeat in the UK if the advantage had arisen in respect of tax payable in the UK.

3.3 Additional Circumstances for Exclusion

The Procurement Act 2023 also sets out additional circumstances under which a supplier must be excluded. These relate to the specific procurement process they are participating in:

Improper behaviour which results in the supplier having an unfair advantage that cannot otherwise be avoided (section 30), such as:

- Accessing confidential information,

- Unduly influencing the decision-making process,

- Failing to provide information (or providing information that is incomplete, inaccurate or misleading).

Participation in pre-market engagement that has put the supplier at an unfair advantage that cannot otherwise be avoided(section 16).
A conflict of interest that puts a supplier at an unfair advantage that cannot otherwise be avoided or the supplier refuses to take steps to avoid it (section 82).

In these cases, the supplier must be treated as an excluded supplier. In relation to these matters, there is no assessment of self-cleaning.

Other circumstances in which tenders must or may be disregarded, such as abnormally low tenders, breaching procedural requirements or where there’s evidence of collusion are covered in Summary Document 7: Assessment and Award.

3.4 Duration of Exclusion

Under the PCR 2015, suppliers were subject to exclusion for up to five years (mandatory exclusions) and 3 years (discretionary exclusions).

The Procurement Act 2023 will align this period to five years for both categories of exclusion, extending the relevant events that can be taken into account for discretionary exclusion grounds from 3 to 5 years.

To address this transition, different timings will apply based on the status of the exclusion ground under the PCR 2015:

Where a ground was a mandatory exclusion ground under PCR 2015: events which occurred prior to five years ago cannot be taken into account.
Where the ground was a discretionary exclusion ground under PCR 2015:events which were known about or which ought to have been known about prior to 5 years ago cannot be taken into account and events which were known about or which ought to have been known about 3 years prior to commencement of the new regime also cannot be taken into account.
Where the ground was not an exclusion ground under PCR 2015: events which occurred / were known about or which ought to have been known about prior to 5 years ago cannot be taken into account and events which occurred / were known about or which ought to have been known about prior to the regime coming into effect cannot be taken into account.

The relevant date of the event for these purposes is, for mandatory exclusion grounds, the date of a relevant conviction or ruling. For discretionary grounds, it is the date by when the decision-maker was aware of or when a reasonably well-informed contracting authority would have been aware of.

4. Assessing Grounds for Exclusion

In accordance with section 58 of theProcurement Act 2023, a supplier is considered to be an excluded supplier (where a mandatory exclusion ground applies) or an excludable supplier (where a discretionary exclusion ground applies) if:

They are on the debarment list for a mandatory or discretionary exclusion ground, or
The contracting authority considers that

(i) a mandatory or discretionary exclusion ground applies either to the supplier or an associated person, and
(ii) the circumstances that led to the exclusion ground applying are continuing or are likely to occur again

A supplier can be an excluded or excludable supplier if an exclusion ground applies to an associated person. Most of the exclusion grounds will also apply to a supplier if they apply to a connected person. Finally, the Act allows contracting authorities to consider the exclusion grounds in relation to all or some sub-contractors. These concepts are all covered later in this document.

An overview of key changes between the Procurement Act and PCR 2015 include:

The right for suppliers to make representations to contracting authorities prior to exclusion.
A new test now focused on confirming whether ‘the circumstances giving rise to the application of an exclusion ground are continuing or are likely to occur again’ (referred to as ‘self-cleaning’).
Greater flexibility over what self-cleaning evidence can be considered as part of this test, including time elapsed.

4.1 Timing for Exclusions

Within any competitive tendering procedure (open or competitive flexible) suppliers must be assessed against exclusion grounds as the first step. For open procedures, this is following receipt of tenders and, for competitive flexible procedures, this is requests to participate. For competitive flexible procedures, exclusions should also be assessed (or confirmed) as part of each progressive stage of the procurement and when final tenders are assessed. Assessing exclusion grounds at the start of a competitive flexible procedure means that the question becomes “is the supplier fit to compete” rather than just “is the supplier fit to be awarded the contract?”. Exclusion grounds should be reviewed as follows:

Open procedure: following receipt of tenders, contracting authorities must / may disregard any tender from a supplier who is excluded / excludable. This should usually happen prior to the assessment of the tenders.

Competitive flexible procedure: following requests to participate or submission of initial tenders, contracting authorities must / may disregard any tender or request to participate from a supplier who is excluded / excludable. If a supplier is excluded, they may not participate or progress in the procurement. This means that exclusions must be considered at the first stage of the procurement and (as a minimum) finally following receipt of final tenders.

Direct Award: contracting authorities must not directly award a contract to an excluded supplier unless there is an overriding public interest in the award of that contract to that supplier. They must consider whether a supplier they wish to directly award to is an excludable supplier and can exercise their discretion to award to an excludable supplier.

Framework call offs: before allowing a supplier to participate in any selection process under the framework, contracting authorities should assess exclusion grounds to check if they have, since the award of the framework, become an excluded or excludable supplier.

4.2 Process for Exclusions

1) Debarment List

If the supplier or an associated person of the supplier appears on the debarment list for a mandatory exclusion ground, then the supplier must be excluded. If they appear on the debarment list for a discretionary exclusion ground, then they may be excluded subject to the contracting authority’s discretion. Where the exclusion ground applies to an associated person, the supplier must be given the opportunity to replace the associated person.

2) Self-Declarations and provision of information

To enable appropriate consideration of potential exclusions, contracting authorities should ask suppliers for the following information to be submitted with their requests to participate in a competitive flexible procedure or with their tenders in an open procedure.

basic information about themselves and their connected persons
self-declarations as to whether any mandatory or discretionary exclusion grounds apply to the supplier, any associated person and any connected persons
where the supplier self-declares that an exclusion ground applies:

- which exclusion ground applies

- whether the exclusion ground applies to the supplier, an associated person or a connected person

- details of the associated person or connected person if a ground applies to them

- a copy of a recorded decision which is the authoritative basis of a conviction or other event or a website address where it can be obtained;

- any relevant self-cleaning evidence as to whether the circumstances giving rise to an exclusion ground are continuing or likely to occur again.

At the same time. Contracting authorities must ask suppliers whether they intend to subcontract the performance of all or part of the contract and details of all known sub-contractors. If contracting authorities wish to consider exclusions with respect to sub-contractors other than associated persons (namely sub-contractors they are relying on to meet conditions of participation), they should also ask for self-declarations from relevant sub-contractors and, if an exclusion ground applies to a sub-contractor, the information listed above.

At this point, contracting authorities must check whether the supplier, associated person or intended sub-contractor is on the debarment list.

Information about the supplier and connected persons may be provided by the supplier via the central digital platform or directly to the contracting authority. Information about associated persons and other sub-contractors will be provided directly and not via the platform. Before the end of the tendering period in open procedures and competitive flexible procedures (or prior to contract award for a direct award or a competitive selection process under a framework), contracting authorities must seek confirmation from the supplier that they have registered on the central digital platform, submitted the above information about itself and connected persons to the platform and shared that information with the contracting authority via the platform. It is best practice to seek confirmation that any information provided directly to the contracting authority is also up-to-date.

If an exclusion ground does or may apply, contracting authorities may wish to ask for additional information such as further details of the circumstances surrounding the event and any further evidence they wish to consider for self-cleaning purposes.

As per section 57 of the Act, contracting authorities must then determine:

whether an exclusion ground applies, and if so
whether the circumstances surrounding it are continuing or are likely to occur again.

3) Self-Cleaning evidence

The supplier may submit evidence to the contracting authority to determine whether the circumstances giving rise to the ground are continuing or are likely to occur again. If the evidence is sufficient, then the supplier will not be an excluded or excludable supplier.

The Act replaces three exhaustive tests that must be satisfied for self-cleaning with a broader and more flexible list of factors that may be considered:

Summary of PCR 2015 (Reg. 57(15))	Summary of Procurement Act (Section 58(1))
Suppliers must fulfil all of the following: a. paid or undertaken to pay compensation in respect of any damage caused by the criminal offence or misconduct; b. clarified the facts and circumstances in a comprehensive manner by actively collaborating with the investigating authorities; and c. taken concrete technical, organisational and personnel measures that are appropriate to prevent further criminal offences or misconduct.	Contracting authorities may have regard to the following: a. evidence that the supplier, connected person or associated person has taken the circumstances seriously, for example by paying compensation; b. steps that the supplier, connected person or associated person has taken to prevent the circumstances occurring again, for example by changing staff or management, or putting procedures and training in place; c. commitments that such steps will be taken, or to provide information or access to allow verification or monitoring of such steps; d. the time that has elapsed since the circumstances last occurred; e. any other evidence, explanation or factor that the authority considers appropriate.

The Act imposes a duty on contracting authorities to take account of any self cleaning evidence. If they intend to exclude the supplier, they must allow the supplier a reasonable opportunity to make representations more generally (e.g., to set out their case that they are not subject to an exclusion ground) and to provide self cleaning evidence.

However, contracting authorities may not request specific pieces of evidence unless this is proportionate to the circumstances, e.g. in relation to a specific conviction, a ruling by a particular professional body, etc.

Contracting authorities should complete due diligence on relevant supporting evidence to ensure that self-cleaning has taken place. Supporting information and evidence provided by a supplier should be independently verifiable where possible.

It is not essential to consider all of the matters outlined in section 58(1); those that the contracting authority “may have regard to” should be relevant and proportionate to the risk posed by the supplier.

Examples of how each of the matters under 58(1) may be considered by contracting authorities may include, but is not limited to:

(a) Evidence that the supplier, associated person or connected person has taken the circumstances seriously (etc.): for example, by paying compensation, making public statements, cooperating with any relevant authorities, etc.

(b) Steps that the supplier, associated person or connected person has taken to prevent the circumstances occurring again (etc.): for example, by changing staff or management (directly related to the exclusion ground), putting improved governance procedures or training in place, or by improving IT systems, etc.

(c) Commitments that such steps will be taken (etc.): for example, agreeing to a formal (and time-bound) improvement plan, reporting on progress, and / or allowing for an independent audit or review of this process.

Future commitments are unlikely to be given equal weight compared with actions already taken and, in the absence of any actions, commitments alone should not usually be sufficient to self-clean.

(d) The time that has elapsed since the circumstances last occurred: the time that has elapsed since an incident without recurrence could be helpful, alongside other forms of self-cleaning evidence, in demonstrating that the circumstances are unlikely to recur. However, as above, time elapsed alone is unlikely to be sufficient to self-clean.

(e) Any other evidence, explanation or factor that the authority considers appropriate: this matter allows for full flexibility in what the supplier may provide and the contracting authority may consider as part of self-cleaning, particularly for an exclusion ground that is difficult to evidence. Other evidence, explanations or factors may be specific to the contracting authority and the procurement. They must be proportionate to the exclusion ground, the risk posed and the nature of the contract.

Types of Evidence

Evidence should be specific to the relevant exclusion ground. As an example, the types of evidence that could be used include (but are not limited to):

From a court or official legal record or register
Conducting or commissioning an investigation
Direct evidence from reliable, trustworthy (and ideally independently verifiable) sources (particularly where this is provided by a supplier)
Media or press information (to be verified)
Evidence of cooperation with industry bodies or regulators, e.g. the environment agency or CMA.
From independent regulated sources, such as law, audit or accountancy firms
From other public bodies
Evidence that could be reproduced in court, in the event of a dispute
Evidence gathered through an investigation conducted or commissioned by the supplier or an independent third party

Contracting authorities should conduct due diligence on any evidence submitted by the supplier or obtained from a third party, and to validate evidence where it is possible to do so.

Scenario (for example purposes only)

A government body is procuring a contract for HR management services. Out of the five tenders received, two of the suppliers were each subject to one mandatory exclusion ground:

Supplier A is subject to the exclusion ground for misconduct in relation to tax.
Supplier B is subject to the exclusion ground for an offence under the Employment Agencies Act 1973.

Both suppliers were given the opportunity to make representations and provide self-cleaning evidence.

Supplier A provided evidence that all associated monies had subsequently been paid, the personnel responsible had been removed and company-wide training established.
Supplier B provided commitments that steps would be taken to prevent future recurrence, including timescales, and proposed to share details of progress with the contracting authority.

On the basis of the seriousness of the offence, its relevance to the subject matter of the contract, the evidence submitted for self-cleaning and the potential ongoing risks posed to the contracting authority and its employees, Supplier B may be more likely to be excluded from the procurement than Supplier A.

It is important to note that this is for example purposes only - every individual exclusion must be considered in detail on a case-by-case basis.

4) Overriding Public Interests

The Procurement Act 2023 limits the scope of PCR 2015 permitted “mandatory exclusions” that can be disregarded, on an exceptional basis, for reasons relating to public interest. The Act provides this provision but only for contracts made by direct award under s.41 (2) Direct award in special cases.

This decision should only be made in exceptional cases and for reasons where:

a. it is necessary in order to construct, maintain or operate critical national infrastructure

b. it is necessary in order to ensure the proper functioning of a sector on which national defence, security or economic stability relies.

c. failure to do so could put military, security or intelligence services at risk.

d. the justification for direct award is extreme and unavoidable urgency, and there are no other suppliers able to deliver the contract in the required timeframe.

5) Discretion

When a supplier is an excludable supplier (i.e. a discretionary ground applies), contracting authorities can use their discretion to decide not to exclude a supplier in this situation. Exercising discretion may include consideration of:

Whether exclusion is proportionate, based on the circumstances being considered.
The seriousness of the circumstances.
The subject matter of the contract, and how it relates to the circumstances.
Whether any national security interests apply.
The risk to service delivery / whether other suppliers are available.

Economic reasons, e.g. the cost of the supplier’s tender, should not be a consideration for applying discretion.

Due diligence should be undertaken prior to any decision on using discretion to not exclude. A record of the decision-making process - plus any residual risk - should be captured as part of the procurement record.

6) Outcome & Notifications

The evidence received and assessed by the contracting authority must be sufficient to satisfy themselves that an exclusion ground doesn’t apply, or to demonstrate that the circumstances giving rise to the exclusion ground are not continuing or likely to occur again). Otherwise, the supplier must be considered as an excluded or excludable supplier.

Supplier notification: If a supplier is excluded they should be notified, in writing, as soon as reasonably possible.

Appropriate authority notification: As per section 59, where a supplier is excluded from a procurement, contracting authorities must notify the appropriate authority (e.g. the Minister, via the Procurement Review Unit) of the decision to exclude within 30 days of the exclusion.

Supplier appeals: A decision made by the contracting authority to exclude a supplier from a procurement process could give rise for a supplier to claim remedies under Part 9 of the Act. If a supplier was to raise a claim about a Ministerial decision to debar them then this would be dealt with by way of an appeal under section 65 of the Procurement Act 2023.

4.3 Subcontractors, Associated Persons and Connected Persons

Grounds for exclusion (and self-cleaning evidence) must be considered not only in relation to the supplier who is submitting a tender or request to participate but also in relation to:

A supplier’s associated persons (consortium members or first tier sub-contractors that the supplier is relying on to satisfy one or more conditions of participation)
A supplier’s connected persons (persons and entities that are connected with a supplier, such as a director, subsidiary company or person with significant control).

Contracting authorities can also consider exclusions in relation to a broader category of sub-contractors if they wish.

Contracting authorities need to protect public contracts from high-risk suppliers. Suppliers are controlled or influenced by individuals/ entities, as well as having control or influence over other individuals and entities. They may also be submitting a tender jointly with other persons or entities and/or may be intending to sub-contract the performance of the contract. This means the risk to public contracts could also be found in other aspects of their supply chains or bidding structures.

Therefore, the exclusions regime provides for suppliers to be excluded / excludable not only where an exclusions ground applies to them but also where a ground applies to certain other persons or entities controlled or associated with the supplier or who are part of their supply chain for the contract.

Subcontractors

A supplier may be excluded or excludable based on whether one or more of the subcontractors is excluded or excludable.

Where the supplier intends to subcontract all or part of the performance of the contract, contracting authorities must obtain information about the intended sub-contractors (of all tiers) and check if they are on the debarment list. Contracting authorities may also consider whether all sub-contractors, or any category of sub-contractor, is excluded or excludable and may request information to determine this.

Associated Person

An associated person for the purpose of exclusions is either (a) another supplier that the supplier is submitted the tender with, i.e. a consortium member or (b) a first tier sub-contractor, in each case that the supplier is relying on to satisfy the conditions of participation for the procurement.

This is distinct from a subcontractor, who may be delivering some elements of the contract, but who may not be relied upon by the supplier to satisfy the conditions of participation.

A sub-contractor for these purposes is a supplier that the main supplier will enter into a legally binding contract with if the main supplier is awarded the contract. Therefore this only covers certain first tier sub-contractors.

Connected Person

A connected person is an individual or an entity with significant control or influence over the supplier, as set out in schedule 6(45):

a. An individual or entity with significant control over the supplier, as defined under section 790C(2) of the Companies Act 2006.

b. A director or shadow director of the supplier

c. A parent or subsidiary undertaking of the supplier, as defined in section 1162 of the Companies Act 2006

d. A predecessor company that has ceased trading due to insolvency which transferred all or substantially all of its assets to the supplier and carried on the same or substantially the same business as the supplier (where the supplier is sometimes known as a phoenix company)

Most of the exclusion grounds that must be considered in relation to a supplier must also be considered in relation to their connected persons, to address the types of risk that the exclusions regime is designed to mitigate.

Scenario: A supplier’s Director has recently been liable to a penalty with respect to evasion of tax in connection with her personal business. Because a Director has significant influence over a company, there is a risk that this Director may not be appropriately handling the supplier’s tax affairs. Subject to self-cleaning evidence demonstrating e.g. that the Director has paid the penalty, that the evasion was not deliberate and that the Director has undertaken training with regard to tax matters, the supplier would be an excludable supplier on the grounds of the Director’s conduct.

Exclusions Based on Subcontractors & Associated Persons

If a contracting authority considers that a supplier’s associated person or other sub-contractor that the contractor authority has assessed for exclusions meets a mandatory exclusion ground and there is a risk the circumstances giving rise to the ground are continuing or likely to occur again, then it must exclude the supplier itself from progressing in the procurement. If they believe that the associated person or subcontractor is excludable, then it may choose to exclude the supplier itself at its discretion.

However, prior to excluding the supplier on this basis, the contracting authority must first:

Notify the supplier of its intention to exclude the supplier (including the reason why)
Provide the supplier with reasonable opportunity to find an alternative subcontractor or associated person.

Where they can do so, and the new associated person or subcontractor is not an excluded or excludable supplier, then the supplier must not be excluded on this basis.

Where the sub-contractor is an associated person, the contracting authority must also be satisfied that the supplier is still able to meet any conditions of participation.

Where an exclusion ground applies to a connected person, the supplier must be given the opportunity to provide self-cleaning evidence. However, where self-cleaning is not sufficient, the supplier must (or, if discretionary, may) be excluded (as it is not possible to replace a connected person in the same way as an associated person or subcontractor).

5. Conditions of Participation

5.1 Introduction

Under the Procurement Act, a condition of participation (section 22) is a condition that a supplier must demonstrate they are capable of satisfying in order to be awarded a public contract. These were previously known as part of the “selection criteria”, and were captured in Part 3 of the Standard Selection Questionnaire (SQ). When compared with award criteria (section 23), which assess the supplier’s tender response, the conditions of participation assess the supplier itself.

The fundamental obligation, that conditions of participation must be proportionate to the procurement, replaces the requirement which existed under the Public Contracts Regulations 2015 that contracting authorities shall limit any requirements to those that are appropriate. In practice, this should not lead to any significant changes. One of the key differences is the Procurement Act does not include any specific provisions on a Single Procurement Document (for example PCR regulation 59) which the Standard Selection Questionnaire (SSQ) complies with.

Whilst conditions of participation are not mandatory for above-threshold procurements, it is expected that most procurements will need to confirm certain aspects of a supplier’s legal and financial capacity, or technical ability, to perform the contract. When planning a procurement, contracting authorities will need to decide whether or not to include conditions of participation, and which conditions of participation they wish to include.

Conditions of participation must be a proportionate means of assessing the supplier’s legal and financial capacity, or technical ability, having regard to the nature, complexity and cost of the contract. By not adding unnecessary conditions, this should enable the widest range of suppliers with the required capacity and ability to perform the contract to participate in the procurement, particularly small and medium sized enterprises (SMEs).

5.2 Changes from PCR 2015

Change: Selection criteria had to be assessed at stage one of a multi-stage process. Conditions of participation may be assessed at any point during a competitive flexible or open procedure (however, may only be used to formally shortlist suppliers in a competitive flexible procedure).

Benefit: Contracting authorities can choose for themselves the most appropriate point in the process to assess suppliers against conditions.

Change: The Act permits a wider range of evidence to be considered as means of proof. However, this must remain proportionate and must not:

a. require suppliers to have been awarded a contract by a particular contracting authority,

b. break the rules on technical specifications in section 56, or

c. require particular qualifications without allowing for their equivalents.

Benefit: Greater flexibility on what may be requested from and submitted by suppliers. Beneficial to SMEs and other suppliers who may struggle to provide specific evidence; beneficial to contracting authorities as a wider range of information can be used for verification.

Change: The Act prohibits contracting authorities from requiring audited accounts from suppliers (who are not otherwise required by the Companies Act 2006 or an overseas equivalent), and from having in place insurance that relates to contract performance before contract award.

Benefit: These measures will encourage suppliers (particularly SMEs) to participate, and remove barriers that may typically have discouraged participation.

Contracting authorities must not set or assess a supplier’s suitability to perform the contract (i.e. legal and financial capacity, or technical ability) for below-threshold procurements as a way of reducing the number of bidders they seek to invite to tender^{[footnote 2]}.

5.3 Setting Conditions of Participation

Each contracting authority is responsible for drafting its own conditions of participation.

A) Do I Need to Set Conditions of Participation?

Conditions of participation are not mandatory for above-threshold procurements. However, it is expected that most above-threshold procurements will need to confirm certain aspects of a supplier’s suitability to deliver a contract. When planning a procurement, contracting authorities will need to decide whether or not to include conditions of participation, and which conditions of participation they wish to include, having regard to the nature, complexity, and cost of the contract.

There are multiple factors that contracting authorities may wish to consider when deciding whether or not to set conditions of participation as part of a procurement. These may include:

Contract value	High-value contracts, non-standard payment terms etc.
Goods, services or works	Whether these are of a specialist or non-specialist nature, high or low risk, a one-off or continuing requirement etc.
Timescales	When the contract needs to be in place.
Associated risks	Levels of contract risk based on subject matter, delivery location, contracting authority, timescales or other factors.
Market factors	Market size, interest, capacity and capability.
Other factors	Related to the specific contract, organisational or stakeholder requirements, etc.

B) Setting Conditions

Where they are required, contracting authorities may set and assess the conditions of participation for a competitive tendering procedure based on the following two headline criteria:

Legal and financial capacity to perform the contract
Technical ability to perform the contract

Contracting authorities are only permitted to include conditions of participation that fall within one of the two headings above. There is no requirement to set conditions of participation under both headings if only one heading is relevant to the procurement.

Conditions of Participation Requirements

Whilst contracting authorities have the flexibility to determine what conditions of participation to include in their procurement (if any), it is worth considering how else to gain assurance of a supplier’s financial and legal capacity and technical ability to be awarded a contract.

The Act does not set out specific questions that contracting authorities must include as part of assessing each heading, but does contain some restrictions on what is not permitted as part of the conditions:

Any Condition of Participation Must…	Any Condition of Participation Must Not…
• Be related to a supplier’s legal and financial capacity, or technical ability, to perform the contract. • Be a proportionate means of ensuring a supplier’s relevant capacity or ability, having regard to the nature, complexity and cost of the public contract. • Allow for equivalents (when requesting particular qualifications or memberships, for example). • Allow for international equivalents to UK standards. • Be distinct from award criteria: focus only on the supplier’s capacity and ability, and not their tender submission.	• Require suppliers to submit audited annual accounts unless they’re required to under the Companies Act 2006 or an overseas equivalent. • Require suppliers to have insurances needed to deliver the contract in place prior to contract award. • Break any rules on technical specifications (section 56) • Require particular qualifications without allowing for equivalents. • Require suppliers to have been awarded a contract by a specific contracting authority.

The Act is clear that every condition must be met for a supplier to be awarded a contract; therefore, it is important to be sure that all conditions are realistic and proportionate when setting them.

Contracting authorities will need to set out any conditions of participation in the tender notice and associated tender documents for each procurement.

Using Conditions of Participation

Conditions of participation can be used:

To ensure that suppliers meet minimum financial, legal or technical requirements in relation to a public contract (via the objective criteria set). Contracting authorities must decide, and clearly set out in the tender notice and tender documents what the criteria are for each condition.
To shortlist or reduce participants who progress to the next stage in a competitive flexible procedure, using objective criteria to score suppliers as set out in the tender notice, associated tender documents and assessment methodology.

Legal & Financial Capacity

Financial Tests

Suppliers may be asked to provide the following information about their ‘economic and financial standing’:

A copy of their audited annual accounts, where the supplier has been required to obtain audited annual accounts in accordance with Part 16 of the Companies Act 2006 or an overseas equivalent.
Alternative forms of evidence that are equivalent to this (for suppliers not required to have audited accounts).

This is to ensure that certain suppliers such as SMEs, VCSEs or recent start-ups are not disadvantaged by the conditions of participation.

Tests to determine a supplier’s financial status, stability and suitability to undertake a contract may be based on factors including, but not limited to, annual turnover, cash flow, debt-to-equity ratios and liquid or cash ratios, etc.

Insurance

Contracting authorities may ask for insurance where they are proportionate to the delivery of the contract.
However, they are not permitted to ask suppliers to have such insurances in place prior to contract award. This is to prevent suppliers from incurring unnecessary costs for insurance without the guarantee of winning the contract.
Contracting authorities may request that suppliers demonstrate their capability to obtain the required insurance after contract award, such as a quotation or other proof of intention.
Where there is a legal requirement for the insurance to be in place, outside of the contract, evidence of this may be required as part of the conditions of participation (i.e. employers’ liability insurance).

Technical Ability

Conditions relating to technical ability may include, but are not limited to:

Qualifications
Experience & past performance
Modern slavery statements
Data protection
Carbon reduction plans
Project-specific questions relating to the supplier’s ability to perform the contract to the appropriate technical standard, or to legal requirements that relate to service delivery (these must be proportionate to the contract), for example:

- Professional accreditations or memberships

- Location (where directly relevant to contract delivery)

- Environmental accreditations

- Staff qualifications and experience

Frameworks: contracting authorities are now able to set and assess conditions of participation (which are defined specifically for the purpose of frameworks (see section 46(2)) when awarding a contract using a competitive selection process under a framework. These are similar to conditions of participation under section 22 and are allowed as long as they are a proportionate way of assessing suppliers’ legal and financial capacity or the technical ability to perform contracts to be awarded under the framework.

5.4 Assessing Conditions of Participation

Where conditions of participation are used in a procurement, the stage at which they will be assessed and the process for assessment must be set out in the tender notice and tender documents.

Open procedures: conditions of participation are the minimum standards that a supplier must satisfy in order to be awarded a contract. They cannot be used to shortlist which suppliers can submit a tender.

Competitive flexible procedures: conditions of participation may be assessed:

As the minimum standards that a supplier must satisfy in order to be awarded a contract
As a separate conditions of participation stage at the start of the tendering procedure which is used to pre-select participants / limit the number of suppliers in an initial tendering round.
As a separate stage at any stage in the tendering procedure to limit / reduce the number of participants who progress to the following stage (scoring and down-selection)

Conditions of participation are assessed:

	Open	Competitive Flexible
Conditions of Participation	At any stage from tender submission to award (but they may not be used to shortlist suppliers who can submit a tender).	At any stage prior to contract award: either at an early stage to limit participants that progress to the next stage, or to confirm the preferred supplier meets requirements before being awarded the contract

Relying on other suppliers

When a supplier alone cannot meet a condition of participation, a supplier may choose to submit a joint tender with, form a consortium with, or enter into a legally binding sub-contracting arrangement with a supplier who satisfies the condition. The supplier is to be considered as satisfying that condition to the extent that a supplier associated with the supplier satisfies the condition.

Where an intended subcontractor has been relied on to pass the conditions of participation, the contracting authority may direct the supplier to enter into a legally binding agreement with the proposed subcontractor in question (as set out in section 72 - sub-contracting directions). If the supplier fails to do so, the contracting authority may choose not to award them the contract.

Evidence & Exclusion

Under PCR 2015, the types of evidence - or means of proof - that a supplier could rely on to demonstrate that they met the selection criteria was limited. Under the Act, a wider range of verification options are available. The only requirements for evidence is that it must be:

Linked directly to legal and financial capacity, or technical ability; and
Proportionate for the purpose of assessing the supplier’s relevant capacity or ability, having regard to the nature, complexity, and cost of the contract

Examples of evidence may include (where proportionate), but are not limited to: copies of evidence and certifications, site visits or audits. Contracting authorities may also use a (relevant) third party to verify compliance, if required.

If a supplier does not satisfy a condition of participation, it cannot be awarded the contract. In a multi-stage procedure, the contracting authority may choose the timing at which exclusion from the procedure takes place.

It will often be good practice, when excluding suppliers who are unable to meet the conditions of participation (and are therefore not capable of delivering the contract), to do so at the earliest point. This will avoid wasting both the contracting authority and supplier’s time during the procurement process. However, in certain procurements, contracting authorities may decide that they will allow suppliers to progress through the procurement with a requirement that they will fulfil the conditions by a later stage and before the award of the contract. For example, a contracting authority may decide not to exclude a supplier, who does not possess a particular standard as part of their technical ability, if they are currently undergoing the process of obtaining the standard at the point when conditions are assessed. If the contracting authority decides to allow the supplier to progress in the procurement, they should be mindful of the equal treatment provisions in section 12. If a contracting authority thinks it is likely to exercise their discretion in this way, it is recommended that the discretion to do so is set out in the tender notice and any associated tender documents so suppliers are informed of this possibility when making their decision whether to tender.

Any supplier who:

Does not meet the conditions of participation, and therefore had their tender disregarded from the award of a contract (in an open or competitive flexible procedure)

Or

Does not progress to the next stage of a tendering procedure following the use of conditions of participation to shortlist suppliers (in a multi-stage competitive flexible procedure)

Should be notified in writing by the contracting authority at the earliest opportunity.

For open procedures, notification would usually be when tenderers are informed of the contract award outcome. For competitive flexible procedures, it should be as soon as possible after the decision is made to exclude the supplier, and before the next stage of the procedure commences.

When notifying suppliers of the decision to exclude them due to failure to satisfy a condition of participation and the supplier has not yet submitted an assessed tender, contracting authorities should consider the assessment summary transparency requirements and aim to provide the appropriate level of detail for where in the procurement process the supplier was excluded. However, this is not a legal obligation.

Where an assessment summary is required because the supplier has submitted an assessed tender, the contracting authority must set out the information specified by section 50 of the Act and as specified in the Procurement Regulations 2024. For information on assessment summaries, see Summary Document 7: Assessment and Award.

43. Exclusions and connected persons: Fact sheet

Connected persons

Schedule 6, paragraph 45) of the act sets out seven definitions of different individuals and entities who are classified as a connected person in relation to the supplier.

Procurement Act schedule 6 para 45: “connected persons”	Definitions and examples
(a) A person with “significant control” over the supplier within the meaning given by section 790C(2) of the Companies Act 2006.	An individual or entity has “significant control” over a supplier where one or more of the following conditions (set out in Part 1 of schedule 1A of the Companies Act 2006) are met: 1. they have more than 25% of shares in the supplier 2. they have more than 25% of voting rights in the supplier 3. they have the right to appoint or remove the majority of the board of directors 4. they have significant control or influence by other means 5. they are a trust or firm that controls the supplier Examples: shareholders, investors, trusts and firms and directors, in each case with significant control.
(b) a director or shadow director of the supplier	A director is defined in the act by reference to the definition in section 250 of the Companies Act 2006. A director is a person who exercises real power within the company, particularly in relation to decision making. The names of directors should be registered for that company on Companies House. A shadow director is defined in the act by reference to the definition in section 251 of the Companies Act 2006. A shadow director is a person who is not a director, but whose directions and instructions are customarily acted on by the directors of the company. Examples: shareholders, investors, and individuals. Professional advisors to a company, e.g. lawyers or accountants, are not classified as shadow directors under the Companies Act.
(c) A parent or subsidiary undertaking of the supplier	“Parent undertaking” and “subsidiary undertaking” are defined in the act by reference to the definitions in section 1162 of the Companies Act 2006. A parent undertaking holds a majority of the voting rights in a subsidiary undertaking, is a member of the subsidiary undertaking with the right to appoint or remove a majority of its board of directors, has the right to exercise a dominant influence over the subsidiary undertaking, or is a member of the other undertaking and controls a majority of the voting rights in the subsidiary undertaking. Alternatively, a parent undertaking may have the power to exercise, or actually exercises, dominant influence or control over the subsidiary undertaking or may be managed on a unified basis with the subsidiary undertaking.
(d) A predecessor company that has ceased trading due to insolvency	A “predecessor company” is defined in the act as meaning a company which— (a) became insolvent and ceased to trade, (b) before it ceased to trade, carried on the same or substantially the same business as the supplier, (c) has transferred all or substantially all of its assets to the supplier, and (d) had at least one director or shadow director who is or has been a director or shadow director of the supplier; “shadow director” has the meaning given in section 251 of the Companies Act 2006. Sometimes known as a “phoenix company”: organisations which have become insolvent and ceased to trade where the business has effectively been transferred to the supplier, which has been newly created to carry on a similar business, and where one or more of the directors of the supplier was a director of the predecessor company at the point at which it ceased to trade. This will primarily be relevant for the discretionary exclusion ground relating to bankruptcy and insolvency situations.
(e) any other person who could reasonably be considered as standing in an equivalent position in relation to the supplier as a person in (a) to (d)	Any person who is in an equivalent position. Examples include: persons in an equivalent position in relation to entities which are not covered by the Companies Act 2006.
(f) any person with the right to exercise, or who actually exercises, significant influence or control over the supplier, and (g) any person over which the supplier has the right to exercise, or actually exercises, significant influence or control	Captures any individual or entity not covered under sections (a)-(e) but who has significant influence or control. Examples may include individuals or entities who: • direct the activities of the business • have the right to veto decisions related to the running of the business • are a company founder who no longer has significant shares in the business but still has influence or control • regularly direct or influence a considerable section of the board, despite not being a board member themselves • have the right to appoint or remove a chief executive

45. Exclusions: Flowcharts

This flowchart maps out the process for supplier exclusions, highlighting the points at which a supplier is identified as an excluded or excludable supplier, and therefore must or may be excluded from the procurement.

Assess exclusions as the first step on receiving tenders / requests to participate. First, complete the questions below, then follow each step in the flowchart.

Initial questions

Has the supplier:

unduly influenced the decision-making process, failed to provide information (or provided inaccurate, incomplete or misleading information) requested by the contracting authority or accessed confidential information that has put them at an unfair advantage that cannot otherwise be avoided?
obtained an unfair advantage – either by participating in preliminary market engagement or through a conflict of interest – that cannot otherwise be avoided?
failed to provide information (or provided information that is inaccurate, incomplete or misleading) requested by the contracting authority about their connected persons, associated persons or sub-contractors

If the answer to the first or second bullets above is yes, then the supplier must be given reasonable opportunity to make representations and provide relevant evidence.

If the answer remains yes after considering any representations and evidence, then the supplier must be excluded and their tender / request to participate disregarded.

If the answer to the third bullet above is yes, then the supplier must be excluded and their tender / request to participate disregarded.

46. Exclusions: Step by step guide

This step-by-step guide is designed to take you through the process of assessing a supplier against the mandatory and discretionary exclusions grounds set out in the act, to determine whether or not a ground applies, and whether the circumstances giving rise to the ground are continuing or are likely to reoccur when to exclude a supplier from a procurement.

Within any competitive tendering procedure (open or competitive flexible) suppliers must be assessed to see if they are an excluded or excludable supplier as the first step following receipt of tenders or requests to participate.

Where the procurement is a direct award, a public interest test applies, meaning that excluded suppliers (where a mandatory exclusion ground applies) may not be excluded. This can be confirmed at step 8.

Step 1 - Has the supplier done any of the following:

unduly influenced the decision-making process, failed to provide information (or provided inaccurate incomplete or misleading information) where requested or accessed confidential information that has put them at an unfair advantage that cannot otherwise be avoided?
obtained an unfair advantage, either by participating in pre-market engagement or through a conflict of interest, that cannot otherwise be avoided?

Having invited and considered representations and evidence from the supplier, does the supplier remain in this position?

If yes, the supplier must be excluded from the procurement. For private utilities, any reference to an excluded supplier, becomes reference to an excludable supplier. Go to step 9.

If no, continue to step 2.

Step 2 - Has the supplier failed to provide information (or provided information that is inaccurate, incomplete or misleading) requested by the contracting authority about their connected persons, associated persons or sub-contractors?

If yes, the supplier must be excluded from the procurement. For private utilities, any reference to an excluded supplier, becomes reference to an excludable supplier. Go to step 9.

If no, continue to step 3.

Step 3 - Debarment. Check the debarment list - is the supplier and/or their associated persons on the debarment list by virtue of a mandatory or discretionary exclusion ground?

If yes:

a. A mandatory ground. The supplier must be excluded from the procurement, and no further assessment steps taken. Where the supplier (or an associated persons) is on the debarment list based on schedule 6 para 34A (national security only), then they are only excluded from contracts of the nature that are described in their entry on the list (e.g. they may only be debarred for providing certain products/services). Go to step 9.

b. A discretionary ground. The supplier is excludable - you may exercise discretion not to exclude. Go to step 4.

If no, continue to step 4.

Step 4 - Check the supplier’s self-declarations, including for any connected persons, associated persons and sub-contractors. Is any party subject to a mandatory or discretionary exclusion ground?

If yes, continue to step 5.

If no, go to step 6.

If yes, continue to step 5.

If no, go to step 6.

Step 5 - Allow the supplier to provide evidence for self-cleaning purposes. Review the self-cleaning evidence provided. Do you consider that the circumstances giving rise to the exclusion ground are continuing or likely to reoccur?

If yes:

a. If a mandatory ground applies to the supplier or a connected person, the supplier must be excluded from the procurement. Go to step 9.

b. If a discretionary ground applies to the supplier or a connected person, the supplier is excludable subject to your discretion on whether to exclude. Go to step 7.

c. If a mandatory or discretionary ground applies to an associated person or a sub-contractor, continue to step 6.

If no, continue with your procurement.

Step 6 - The supplier has the opportunity to replace the relevant associated person or subcontractor. Does the supplier replace the relevant party (as applicable)?

If yes, repeat steps 3 to 5 (as appropriate) to ensure the supplier is no longer an excluded or excludable supplier (and, in the case of associated persons, still able to meet the relevant conditions of participation); if not, continue with your procurement.

If no:

a. In the case of a mandatory ground applying to any associated person or sub-contractor, the supplier must be excluded from the procurement. Go to step 9.

b. Where a discretionary ground applies, the supplier is excludable subject to your discretion on whether to exclude. Go to step 7.

Step 7 - Discretion. Based on factors that include, but are not limited to, the nature of the supplier’s circumstances, the subject matter of the procurement and proportionality, you may exercise discretion as to whether or not to exclude an excludable supplier (where a discretionary exclusion ground applies). Do you exercise this discretion to exclude the supplier?

If yes, subject to ministerial approval, where required, the supplier is therefore excluded from the procurement. If the supplier is to be excluded on basis of the discretionary exclusion ground in paragraph 14 of schedule 7 (threat to national security), you must notify a minister of the crown of the intention to exclude the supplier, and gain confirmation to exclude. Go to step 9.

If no, continue with your procurement.

Step 8 - Overriding public interest test. Is the contract being procured by way of direct award and, if so, is there an overriding public interest in awarding the contract to an excluded supplier?

If yes, continue with your procurement.

If no, the supplier must be excluded from the procurement. Exclude the supplier, find an alternative supplier and complete step 9.

Step 9 - Notification. Where a supplier is excluded from a procurement, you must notify the Procurement Review Unit of the decision to do so within 30 days.

It is best practice to notify the supplier, in writing, of the decision to exclude, as soon as is reasonably possible, and to keep a record of the decision-making process.

47. Exclusions checklist

This checklist is designed to assist with the supplier exclusions process. For more detailed information on each stage, see the step-by-step guide.

1. Check and exclude any supplier who has:

a. Failed to provide information (or provided information that is inaccurate, incomplete or misleading) requested by the contracting authority about their connected persons, associated persons or sub-contractors

2. Check any supplier who has:

b. Unduly influenced the decision-making process,

c. Failed to provide information / accurate information (or provided inaccurate, incomplete or misleading information) , where requested or accessed confidential information that has put them at an unfair advantage that cannot otherwise be avoided?

d. Obtained an unfair advantage – either by participating in pre-market engagement or through a conflict of interest – that cannot be otherwise avoided

Having invited and considered representations and evidence from the supplier, exclude any supplier who remains in this position.

3. Check the debarment list (suppliers & associated persons) and exclude suppliers where a mandatory ground applies. For private utilities, any reference to an excluded supplier, becomes reference to an excludable supplier. Where the supplier (or associated persons) is on the debarment list based on schedule 6 para 34A (national security only), then the supplier is only excluded from contracts of the nature that are described in their entry on the list (e.g. they may only be debarred for providing certain products /services). For excludable suppliers exercise discretion.

4. Check and review self-declarations for the supplier (including self-declarations on behalf of associated persons, connected persons and sub-contractors).

5. If an exclusion ground applies, allow the supplier to provide evidence for “self-cleaning” purposes.

6. Review the self-cleaning information provided. If you are satisfied that the circumstances are continuing or likely to reoccur, then the supplier must be excluded (mandatory ground) or is excludable (discretionary ground) and discretion must be exercised. Where the supplier is an excluded or excludable supplier by virtue of an associated person or sub-contractor, before excluding the supplier, invite and consider representations and evidence before excluding.

7. For excludable suppliers, use discretion to determine whether to exclude these suppliers (subject to ministerial approval - if the supplier is to be excluded on the basis of the discretionary exclusion ground in paragraph 14 of schedule 7 threat to national security, you must notify a minister of the crown of the intention to exclude the supplier, and gain confirmation to exclude) or continue with them as part of the procurement.

8. If the contract is being procured using the direct award procedure, and there is an overriding public interest in awarding the contract to an excluded supplier, you may proceed to award the contract.

9. Where a supplier is excluded from a procurement or their tender disregarded (or action is taken in relation to an associated person or sub-contractor or exclusion from a dynamic market - other than exclusion for failure to co-operate with a debarment investigation under paragraph 43 of schedule 6), you must notify the Procurement Review Unit of the decision to do so within 30 days.

10. Notify the supplier, in writing, of the decision to exclude, as soon as reasonably possible.

11. Keep and store a record of the decision-making process.

48. Conditions of participation: Fact sheet

What are conditions of participation?

Under the Procurement Act 2023, a condition of participation is a condition to ensure that suppliers have the legal and financial capacity or technical ability to perform the contract. The supplier must demonstrate they are capable of satisfying these conditions in order to be awarded a public contract. They are similar to selection criteria requirements, which existed under the Public Contracts Regulations 2015.

When can I set conditions of participation?

Conditions of participation are not mandatory for above-threshold procurements. However, it is expected that most procurements will need to confirm certain aspects of a supplier’s suitability to deliver a contract.

There are multiple factors that contracting authorities may wish to consider when deciding whether or not to set conditions of participation as part of a procurement. These may include:

contract value - high-value contracts, nonstandard payment terms etc.
goods, services or works - whether these are of a specialist or non-specialist nature, high or low risk, a one-off or continuing requirement etc.
timescales - when the contract needs to be in place
associated risks - levels of contract risk based on subject matter, delivery location, contracting authority, timescales or other factors
market factors - market size, interest, capacity and capability
other factors - related to the specific contract, organisational or stakeholder requirements etc.

Contracting authorities must not set or assess a supplier’s suitability to perform the contract (i.e. legal and financial capacity, or technical ability) for below-threshold procurements as a way of reducing the number of bidders they seek to invite to tender. Except where the contract is a works contract and has an estimated value of— (a) in the case of a contract to be awarded by a central government authority, not less than £138,760, or (b) otherwise, not less than £213,477.

How should questions be designed?

Each contracting authority is responsible for setting its own conditions of participation.

Conditions of participation must:

be related to a supplier’s legal and financial capacity, or technical ability, to perform the contract
be a proportionate means of ensuring a supplier’s relevant capacity or ability, having regard to the nature, complexity and cost of the public contract
allow for equivalents (when requesting particular qualifications or memberships, for example)
allow for international equivalents to UK standards
be distinct from award criteria: focus only on the supplier’s credentials, and not their tender submission

Conditions of participation must not:

require suppliers to submit audited annual accounts unless they’re required to under the Companies Act 2006 or an overseas equivalent
require suppliers to have insurances needed to deliver the contract in place prior to contract award
break any rules on technical specifications (section 56)
require particular qualifications without allowing for equivalents
require suppliers to have been awarded a contract by a specific contracting authority

How will this information be collected?

The act does not include any specific provisions on the use of a Single Procurement Document or Standard Selection Questionnaire (SQ), and is therefore less prescriptive. However, some elements of conditions of participation are likely to be similar in practice to selection criteria.

Information about suppliers in an above threshold procurement process will no longer be captured using the Standard Selection Questionnaire (SQ) used under PCR 2015. Some of this information will be captured using the Supplier Information System on the central digital platform, and the remainder will be captured separately as part of each contracting authority’s own electronic tendering system. Together, this information will be used to assess suppliers against exclusion grounds and, where applicable, conditions of participation.

Supplier information system (central digital platform)

basic supplier information (e.g. name, address, contract details etc.)
exclusion grounds
some economic and financial standing information, such as audited accounts
details of connected persons and beneficial ownership

Conditions of participation

This will include information relating to conditions on a supplier’s legal and financial capacity, and technical ability, to perform the contract.

Development

The intention is for the central digital platform to be developed over time to include additional modules which will contain policy driven questions that are business and not procurement specific to further reduce duplication for contracting authorities and suppliers. These include additional modules on policy driven topics such as modern slavery, payment, carbon net zero and data protection.

When and how can conditions of participation be assessed?

Where conditions of participation are used in a procurement, the stage at which they will be assessed and the process for assessment must be set out in the tender notice and tender documents.

In an open procurement, conditions of participation are assessed at any stage from tender submission to award (but they may not be used to shortlist suppliers who can submit a tender).

In a competitive flexible procurement, conditions of participation are assessed at any stage prior to contract award. This can be either at an early stage to limit participants that progress to the next stage, or to confirm the preferred supplier meets requirements before being awarded the contract.

There is greater flexibility on what may be requested from suppliers in terms of evidence to demonstrate they satisfy the conditions, so long as such requirements for evidence are:

linked directly to legal and financial capacity, or technical ability and
proportionate for the purpose of assessing the supplier’s relevant capacity or ability, having regard to the nature, complexity, and cost of the contract

Examples of evidence may include (where proportionate), but are not limited to: copies of evidence and certifications, site visits or audits. Contracting authorities may also use a (relevant) third party to verify compliance, if required.

If a supplier does not satisfy a condition of participation, it cannot be awarded the contract.

Exceptions apply ↩
Except where the contract is a works contract and has an estimated value of— (a) in the case of a contract to be awarded by a central government authority, not less than £138,760, or (b) otherwise, not less than £213,477 ↩

Question 3

3.1  Overview of Changes

Accepted Answer

Changes to the exclusions regime under the Procurement Act include:

New grounds for exclusion.
Strengthened and expanded grounds for exclusion.
Application of exclusion where an exclusion ground applies to a supplier’s “connected persons”, “associated persons” and other sub-contractors.
Gradual alignment of the period of time suppliers are subject to exclusion, increasing discretionary grounds to five years from when the contracting authority knew or ought to have been aware of it, matching mandatory grounds of five years from when the event occurred.
The creation of a debarment list, which is covered in Summary Document 8.

There are two types of exclusion grounds, set out in section 57:

Mandatory Exclusion grounds (Schedule 6): covering the most serious, high-risk scenarios.

Where a mandatory ground applies and the circumstances giving rise to that ground are continuing or are likely to occur again, or that supplier is on the debarment list for a mandatory ground, the supplier is considered to be an excluded supplier in relation to the procurement and may proceed no further.

Discretionary Exclusion grounds (Schedule 7): covering serious scenarios which may or may not merit exclusion depending on the circumstances. Where a discretionary ground applies and the circumstances giving rise to that ground are continuing or are likely to occur again, or that supplier is on the debarment list for a discretionary ground, the supplier is considered to be an excludable supplier and contracting authorities may choose, at their discretion, to exclude them from the procurement.

Question 4

3.2  Changes to Exclusion Grounds

Accepted Answer

The key changes to the exclusion grounds, under the Procurement Act 2023, are:

Exclusion ground	Change
Mandatory exclusion grounds (Schedule 6)
Corporate manslaughter and corporate homicide	New
Theft, robbery, burglary, offences relating to stolen goods and certain other dishonesty offences	New
Blackmail, fraud and fraudulent trading	Extended
Labour market, slavery and human trafficking offences	Extended
Tax offences & misconduct in relation to tax	Extended
Cartel offences and competition law infringements	Extended
Failure to cooperate with debarment investigation	New
Threat to national security for particular types of contracts	New
Equivalents outside the UK	Extended
Ancillary offences (such as aiding and abetting)	Extended
Discretionary exclusion grounds (Schedule 7)
Labour market misconduct	New
Environmental misconduct	New
Poor performance	New
Threat to national security	New
Ancillary offences (such as aiding and abetting)	Extended

Terrorism, bribery, money laundering, certain slavery and trafficking offences and organised crime have been clarified but remain mandatory exclusion grounds. Insolvency and bankruptcy, potential competition infringements, professional misconduct, breach of contract and acting improperly in a procurement have been clarified but remain discretionary exclusion grounds.

Further detail on specific grounds are:

1. National Security

Under the Procurement Act 2023, contracting authorities have a discretion to exclude a supplier where the supplier (or associated person or connected person) poses a or there is a current threat to national security of the UK and where the circumstances giving rise to that situation are continuing or are likely to occur again. The supplier can only be excluded from a procurement on this ground where a Minister of the Crown agrees that the ground applies and that the supplier should be excluded. Contracting authorities are required to exclude a supplier from particular types of contracts where the supplier is on the debarment list on the basis that the supplier (or associated person or connected person) poses a threat to the national security of the UK and poses such a threat in relation to contracts of that description.

These two new national security grounds (one mandatory, and one discretionary) are included with the objective of protecting the UK’s national security interests.

The national security grounds provide a new lever to mitigate national security risks to the UK. Threat actors may wish to target the UK, including its critical infrastructure and services. These exclusion provisions provide a way of protecting the supply chain where the supply chain is the vector through which adversaries target the UK government.

The National Security Unit for Procurement (NSUP) has been established in the Cabinet Office to support coordination of national security assessments for exclusion and debarment decisions. NSUP will work across government, including with the national security community, to ensure ministerial decisions on exclusions and debarments are made with the most relevant and accurate information to hand. Contracting authorities will be able to refer cases to NSUP where they suspect a supplier poses a national security risk. Public guidance will be issued to support contracting authorities in understanding when referring a company to NSUP might be appropriate.

Mandatory ground (Schedule 6, paragraph 35) National security

This exclusion ground applies where a supplier has been put on the debarment list in relation to public contracts of a particular description where the supplier (or an associated person):

a. poses a threat to UK national security and

b. poses a threat to the delivery of contracts of a particular description, which may include:

The goods, works or services being supplied (e.g. software, communications equipment, data services).
The location of contract delivery or supply (e.g. for sensitive sites or critical national infrastructure).
The contracting authority in question (where the risk is particularly acute for a specific organisation)

This mandatory ground differs from the others under schedule 6 in that it can only be used by contracting authorities when the supplier concerned is on the debarment list for this ground. Where the exclusion ground applies, Ministers will have the power to place a supplier on a debarment list, following an assessment, on this national security ground. The supplier will usually remain on the debarment list for 5 years unless the supplier has been able to demonstrate that they have ‘self-cleaned’ with evidence the Minister agrees is sufficient to demonstrate that the circumstances giving rise to the ground is no longer continuing or is not likely to recur, or with evidence the Minister agrees that the ground no longer applies. Contracting authorities then must exclude that supplier from a covered procurement for contracts of the description specified in the debarment list. For other types of contracts, then there is no obligation to exclude the supplier (although contracting authorities will have a discretion to exclude on the basis of the discretionary exclusion ground as that will apply to any supplier on the debarment list on this basis).

Scenario 1:

A central government department is undertaking a procurement for supplying stationery. They receive a tender from Supplier A, who are on the debarment list under the mandatory national security ground with respect to contracts for digitisation and digital storage of sensitive information. Because the procurement in question relates only to the supply of stationery, with no sensitive information being handled by Supplier A, they are not an excluded supplier on this basis for this procurement.

Scenario 2:

A police force is procuring new wireless video and radio communication equipment for their officers. They receive a tender from Supplier B, who are on the debarment list for under the mandatory national security ground with respect to contracts for the provision of electronic communications equipment used in secure environments. Because the procurement in question is for electronic communication equipment which will be used within a secure environment, Supplier B is an excluded supplier for this procurement.

The investigation process for debarment for the UK Government will be managed by the newly established National Security Unit for Procurement (NSUP) - more information can be found in Summary Document 8 - Remedies, Procurement Oversight and the Debarment List.

A contracting authority excluding a supplier on this ground must follow the Ministerial notification process set out by NSUP (and/or the Welsh Ministers or Northern Ireland department department if the contracting authority is a devolved Welsh authority or a transferred Northern Ireland authority).

Discretionary ground (Schedule 7, paragraph 14 & Section 29)

A discretionary exclusion ground applies to a supplier if the contracting authority determines that the supplier (or an associated person or a connected person) poses a threat to the national security of the United Kingdom. This applies to all covered procurement (i.e. above threshold and not exempt). However, contracting authorities must seek Ministerial approval before excluding the supplier on this ground. As with all exclusions, they must also notify the relevant Minister of the Crown, or the Northern Ireland or Welsh ministers where applicable when they exclude. Further guidance will be provided by the National Security Unit for Procurement on the steps contracting authorities should take.

Suppliers may have already been put on the debarment list on this discretionary ground, or on the mandatory ground previously described. If this is the case, they will appear on the debarment list. If the supplier is on the debarment list on the discretionary ground, then contracting authorities may consider the details of that debarment investigation to determine whether or not to exclude them from their procurement. The same applies for private utilities, irrespective of whether the mandatory or discretionary ground applies, as all exclusion grounds are discretionary for private utilities. Further guidance will be provided.

2. Breach of Contract & Poor Performance (Schedule 7(12)

The discretionary exclusion ground relating to poor performance in PCR 2015 only covered ‘significant or persistent deficiencies’ in contract performance, where they led to early termination, damages or comparable sanctions. Such poor performance was not always visible to the marketplace and therefore it was difficult for contracting authorities to exclude suppliers on this basis.

The Procurement Act 2023 has made breach of contract and poor performance more visible by the requirement to publish contract performance notices in particular circumstances. This will support contracting authorities exercising the new exclusion grounds. These have been extended to cover sufficiently serious breaches (where the breach results in termination, damages or settlement) and, importantly, to also cover where a supplier:

(a) has not performed a relevant contract to a relevant authority’s satisfaction,

(b) was given proper opportunity to improve performance, and

(c) failed to do so.

A separate ground applies if a contracting authority has published information under section 71(5) in respect of breach or poor performance.

This means that contracting authorities now have the discretion to exclude suppliers where it can be demonstrated that they have not performed one or more contracts to a satisfactory level, and have failed to improve that failure. A supplier may be given proper opportunity to improve performance by way of contractual measures put in place by the contracting authority, for example, notification of poor performance and clear time periods to rectify, rectification plans or improvement plans. Contracts should also include clear performance requirements, by way of a clear specification and other performance requirements, and clear thresholds for when performance is not satisfactory, such as thresholds for failure to comply with particular KPIs over a set period.

Section 71(5) relates to a new requirement for contracting authorities to publish, on the central digital platform, a contract performance notice in the event of supplier breach or poor performance, as detailed above. Further details about this notice are provided in Summary Document 9: Contract Governance.

This is a ground for discretionary exclusion in itself but the data contained within the notice can also provide a useful source of information about the breach or poor performance to help contracting authorities in exercising their discretion to decide whether or not a supplier is to be excluded. Information should be treated proportionately, and steps taken to acquire further details, if required, as part of the due diligence process, should also be proportionate.

3. Modern Slavery

Labour market, slavery and human trafficking offences, Schedule 6 (19-26)

The PCR 2015 included mandatory exclusion grounds for certain offences under the Modern Slavery Act 2015. These grounds covered certain slavery and human trafficking offences only.

The Procurement Act 2023 has:

Extended the types of offences (under a wider range of legislation) as mandatory exclusion grounds for labour market, slavery and human trafficking offences: specifically an offence under section 30 of the Modern Slavery Act 2015 for breach of certain orders made under that Act
Included, in addition to slavery and human trafficking, offences of breach of labour market enforcement orders, refusal or wilful neglect to pay national minimum wage and offences relating to gangmasters.
Included a new discretionary ground covering labour market misconduct: specifically where certain slavery, trafficking, exploitation or labour market orders have been made or where there is sufficient evidence of labour market, slavery or human trafficking offences but no conviction.

In addition, across many exclusion grounds - including modern slavery grounds - the Act has made the grounds more specific and easier to assess by making it clearer which UK laws are associated with each ground.

4. Tax Offences (Schedule 6, paragraphs 29-31)

The PCR 2015 included one mandatory and one discretionary exclusion ground relating to the non-payment of taxes. To reflect the seriousness of these matters, the Act has included three mandatory grounds for tax offences (schedule 6, paragraphs 29-31) and five mandatory grounds for misconduct in relation to tax (schedule 6, paragraphs 36-40) which:

Listed specific tax-related offences as mandatory exclusion grounds: cheating the public revenue, fraudulent evasion of certain taxes and failure to prevent facilitation of tax evasion.
Ensuring the mandatory exclusion grounds apply where such relevant tax-related offences have been committed irrespective of whether the supplier has repaid or committed to repay the tax.
Broaden and clarify the range of situations covered under the discretionary exclusion grounds for tax misconduct, including stating which penalties and HMRC findings are grounds, to cover more areas of misconduct.

5. Overseas Misconduct

Equivalents outside the United Kingdom (Schedule 6, paragraphs 34 and 42)

The Act now also clarifies and strengthens provisions for offences and misconduct that are committed overseas.

There are now specific mandatory exclusion grounds where the supplier

Is convicted under a non-UK law of an offence that would be an offence in the UK if it had been committed in the UK.
Has been subject to a tax-related penalty or decision by a non-UK regulator, court or authority that would give rise to a penalty or decision in the UK if it had been committed in the UK, or has had a tax advantage outside the UK that would have resulted in a tax defeat in the UK if the advantage had arisen in respect of tax payable in the UK.

Question 5

3.3  Additional Circumstances for Exclusion

Accepted Answer

The Procurement Act 2023 also sets out additional circumstances under which a supplier must be excluded. These relate to the specific procurement process they are participating in:

Improper behaviour which results in the supplier having an unfair advantage that cannot otherwise be avoided (section 30), such as:

- Accessing confidential information,

- Unduly influencing the decision-making process,

- Failing to provide information (or providing information that is incomplete, inaccurate or misleading).

Participation in pre-market engagement that has put the supplier at an unfair advantage that cannot otherwise be avoided(section 16).
A conflict of interest that puts a supplier at an unfair advantage that cannot otherwise be avoided or the supplier refuses to take steps to avoid it (section 82).

In these cases, the supplier must be treated as an excluded supplier. In relation to these matters, there is no assessment of self-cleaning.

Other circumstances in which tenders must or may be disregarded, such as abnormally low tenders, breaching procedural requirements or where there’s evidence of collusion are covered in Summary Document 7: Assessment and Award.

Question 6

3.4  Duration of Exclusion

Accepted Answer

Under the PCR 2015, suppliers were subject to exclusion for up to five years (mandatory exclusions) and 3 years (discretionary exclusions).

The Procurement Act 2023 will align this period to five years for both categories of exclusion, extending the relevant events that can be taken into account for discretionary exclusion grounds from 3 to 5 years.

To address this transition, different timings will apply based on the status of the exclusion ground under the PCR 2015:

Where a ground was a mandatory exclusion ground under PCR 2015: events which occurred prior to five years ago cannot be taken into account.
Where the ground was a discretionary exclusion ground under PCR 2015:events which were known about or which ought to have been known about prior to 5 years ago cannot be taken into account and events which were known about or which ought to have been known about 3 years prior to commencement of the new regime also cannot be taken into account.
Where the ground was not an exclusion ground under PCR 2015: events which occurred / were known about or which ought to have been known about prior to 5 years ago cannot be taken into account and events which occurred / were known about or which ought to have been known about prior to the regime coming into effect cannot be taken into account.

The relevant date of the event for these purposes is, for mandatory exclusion grounds, the date of a relevant conviction or ruling. For discretionary grounds, it is the date by when the decision-maker was aware of or when a reasonably well-informed contracting authority would have been aware of.

4. Assessing Grounds for Exclusion

In accordance with section 58 of theProcurement Act 2023, a supplier is considered to be an excluded supplier (where a mandatory exclusion ground applies) or an excludable supplier (where a discretionary exclusion ground applies) if:

They are on the debarment list for a mandatory or discretionary exclusion ground, or
The contracting authority considers that

(i) a mandatory or discretionary exclusion ground applies either to the supplier or an associated person, and
(ii) the circumstances that led to the exclusion ground applying are continuing or are likely to occur again

A supplier can be an excluded or excludable supplier if an exclusion ground applies to an associated person. Most of the exclusion grounds will also apply to a supplier if they apply to a connected person. Finally, the Act allows contracting authorities to consider the exclusion grounds in relation to all or some sub-contractors. These concepts are all covered later in this document.

An overview of key changes between the Procurement Act and PCR 2015 include:

The right for suppliers to make representations to contracting authorities prior to exclusion.
A new test now focused on confirming whether ‘the circumstances giving rise to the application of an exclusion ground are continuing or are likely to occur again’ (referred to as ‘self-cleaning’).
Greater flexibility over what self-cleaning evidence can be considered as part of this test, including time elapsed.

4.1 Timing for Exclusions

Within any competitive tendering procedure (open or competitive flexible) suppliers must be assessed against exclusion grounds as the first step. For open procedures, this is following receipt of tenders and, for competitive flexible procedures, this is requests to participate. For competitive flexible procedures, exclusions should also be assessed (or confirmed) as part of each progressive stage of the procurement and when final tenders are assessed. Assessing exclusion grounds at the start of a competitive flexible procedure means that the question becomes “is the supplier fit to compete” rather than just “is the supplier fit to be awarded the contract?”. Exclusion grounds should be reviewed as follows:

Open procedure: following receipt of tenders, contracting authorities must / may disregard any tender from a supplier who is excluded / excludable. This should usually happen prior to the assessment of the tenders.

Competitive flexible procedure: following requests to participate or submission of initial tenders, contracting authorities must / may disregard any tender or request to participate from a supplier who is excluded / excludable. If a supplier is excluded, they may not participate or progress in the procurement. This means that exclusions must be considered at the first stage of the procurement and (as a minimum) finally following receipt of final tenders.

Direct Award: contracting authorities must not directly award a contract to an excluded supplier unless there is an overriding public interest in the award of that contract to that supplier. They must consider whether a supplier they wish to directly award to is an excludable supplier and can exercise their discretion to award to an excludable supplier.

Framework call offs: before allowing a supplier to participate in any selection process under the framework, contracting authorities should assess exclusion grounds to check if they have, since the award of the framework, become an excluded or excludable supplier.

4.2 Process for Exclusions

1) Debarment List

If the supplier or an associated person of the supplier appears on the debarment list for a mandatory exclusion ground, then the supplier must be excluded. If they appear on the debarment list for a discretionary exclusion ground, then they may be excluded subject to the contracting authority’s discretion. Where the exclusion ground applies to an associated person, the supplier must be given the opportunity to replace the associated person.

2) Self-Declarations and provision of information

To enable appropriate consideration of potential exclusions, contracting authorities should ask suppliers for the following information to be submitted with their requests to participate in a competitive flexible procedure or with their tenders in an open procedure.

basic information about themselves and their connected persons
self-declarations as to whether any mandatory or discretionary exclusion grounds apply to the supplier, any associated person and any connected persons
where the supplier self-declares that an exclusion ground applies:

- which exclusion ground applies

- whether the exclusion ground applies to the supplier, an associated person or a connected person

- details of the associated person or connected person if a ground applies to them

- a copy of a recorded decision which is the authoritative basis of a conviction or other event or a website address where it can be obtained;

- any relevant self-cleaning evidence as to whether the circumstances giving rise to an exclusion ground are continuing or likely to occur again.

At the same time. Contracting authorities must ask suppliers whether they intend to subcontract the performance of all or part of the contract and details of all known sub-contractors. If contracting authorities wish to consider exclusions with respect to sub-contractors other than associated persons (namely sub-contractors they are relying on to meet conditions of participation), they should also ask for self-declarations from relevant sub-contractors and, if an exclusion ground applies to a sub-contractor, the information listed above.

At this point, contracting authorities must check whether the supplier, associated person or intended sub-contractor is on the debarment list.

Information about the supplier and connected persons may be provided by the supplier via the central digital platform or directly to the contracting authority. Information about associated persons and other sub-contractors will be provided directly and not via the platform. Before the end of the tendering period in open procedures and competitive flexible procedures (or prior to contract award for a direct award or a competitive selection process under a framework), contracting authorities must seek confirmation from the supplier that they have registered on the central digital platform, submitted the above information about itself and connected persons to the platform and shared that information with the contracting authority via the platform. It is best practice to seek confirmation that any information provided directly to the contracting authority is also up-to-date.

If an exclusion ground does or may apply, contracting authorities may wish to ask for additional information such as further details of the circumstances surrounding the event and any further evidence they wish to consider for self-cleaning purposes.

As per section 57 of the Act, contracting authorities must then determine:

whether an exclusion ground applies, and if so
whether the circumstances surrounding it are continuing or are likely to occur again.

3) Self-Cleaning evidence

The supplier may submit evidence to the contracting authority to determine whether the circumstances giving rise to the ground are continuing or are likely to occur again. If the evidence is sufficient, then the supplier will not be an excluded or excludable supplier.

The Act replaces three exhaustive tests that must be satisfied for self-cleaning with a broader and more flexible list of factors that may be considered:

Summary of PCR 2015 (Reg. 57(15))	Summary of Procurement Act (Section 58(1))
Suppliers must fulfil all of the following: a. paid or undertaken to pay compensation in respect of any damage caused by the criminal offence or misconduct; b. clarified the facts and circumstances in a comprehensive manner by actively collaborating with the investigating authorities; and c. taken concrete technical, organisational and personnel measures that are appropriate to prevent further criminal offences or misconduct.	Contracting authorities may have regard to the following: a. evidence that the supplier, connected person or associated person has taken the circumstances seriously, for example by paying compensation; b. steps that the supplier, connected person or associated person has taken to prevent the circumstances occurring again, for example by changing staff or management, or putting procedures and training in place; c. commitments that such steps will be taken, or to provide information or access to allow verification or monitoring of such steps; d. the time that has elapsed since the circumstances last occurred; e. any other evidence, explanation or factor that the authority considers appropriate.