Guidance

Module 8: Remedies, procurement oversight and the debarment list

Published 22 April 2024

The learning manual and all of the material within it has been produced for the purpose of learning and development only, and does not constitute and should not be relied upon as legal or other professional advice. We have aimed to ensure that the information is correct as at 26th July 2024. The content has not been updated following any relevant changes. In particular, the material used in the e-Learning and learning manual has been based on a draft version of the Procurement Regulations 2024 and so users should review the Procurement Regulations 2024 laid before Parliament and the guidance issued by Cabinet Office in due course.

1. Introduction

This document intends to provide a summary of the remedies system available to suppliers following a contracting authority’s breach of their statutory duties under the Procurement Act 2023, as well as procurement oversight functions and an overview of the debarment list. It will identify the key changes against the previous regime (Public Contracts Regulations 2015).

2. Remedies

Remedies are an enforcement by the courts to compensate a supplier that has suffered, or is at risk of suffering, loss or damage due to a contracting authority breaching a duty under the Procurement Act 2023. The remedies system is broadly unchanged from the previous system under the Public Contracts Regulations 2015. However, the enhanced transparency requirements throughout the Act (that apply at all stages of the procurement process) are likely to reveal any potential breaches earlier in the process. This should result in greater potential to resolve disputes before the contract is awarded (and outside formal legal proceedings) as much as possible.

The remedies system is there to provide the appropriate redress for suppliers if a contracting authority breaches its obligations under Parts 1 to 5, 7 and 8 of the Procurement Act when carrying out a covered procurement. This includes frameworks, contracts made under frameworks (call-off contracts) and contracts made under dynamic markets, as well as managing public contracts.

PART 1 - KEY DEFINITIONS

PART 2 - PRINCIPLES AND OBJECTIVES (except the duty to comply with section 12(4) (requirement to have regard to barriers facing SMEs), and section 13(9) or 14(8) (requirement to have regard to procurement policy statements))

PART 3 - AWARD OF PUBLIC CONTRACTS AND PROCEDURES

PART 4 - MANAGEMENT OF PUBLIC CONTRACTS

PART 5 - CONFLICTS OF INTEREST

PART 7 - IMPLEMENTATION OF INTERNATIONAL OBLIGATIONS (except the duty to comply with section 90 (treaty state suppliers: non-discrimination) if the procurement is not a covered procurement)

PART 8 - INFORMATION AND NOTICES: GENERAL PROVISION

Remedies are available where:

a. the supplier is a United Kingdom supplier or treaty state supplier (provided the goods and/or services are covered by Schedule 9 Treaty State Suppliers (Specified International Agreements)); and

b. the supplier “has suffered, or is at risk of suffering loss or damage” as a result of the breach; and

c. the claim is raised within the time periods detailed in Section 106 (time limits on claims). If the claim is not raised within the appropriate time limit, the supplier effectively waives its right to a remedy.

Exemptions to the remedies regime are:

• Below-threshold contracts

• Debarment decisions made by a Minister of the Crown

• Non-United Kingdom, non-treaty state suppliers.

What are the main changes and benefits of the remedies system under the Procurement Act 2023?

Change: Clearer drafting of the legislation relating to remedies.

Benefit: Aligns to the enhanced transparency requirements and steers suppliers with a valid claim to raise it earlier whilst within the clear time limits (limitation periods), to minimise disruption and costs for all parties which occur with later challenges.

Change: Automatic suspension only applies during the standstill period.

Benefit: Clear parameters of when a contract or contract modification award must be automatically suspended (not entered into).

Change: The standstill period is now eight working days beginning with the day on which a contract award notice is published.

Benefit: Simpler and more straightforward to apply and eases pressure on procurements awarded close to weekends or bank holidays.

Change: A new automatic suspension test has been introduced to replace the commonly used test that was introduced in case law in 1975 (American Cyanamid Co (No 1) v Ethicon Ltd [1975] UKHL 1). The case related to a patent dispute but considered the principles that should apply when the Court considers granting an interim injunction. The test is known as the ‘American Cyanamid’ test^{[footnote 1]}.

Benefit: The new test has been designed specifically for procurement cases. It sets out the factors the court should take into consideration when determining if the automatic suspension should be lifted. It ensures suppliers’ interests are considered alongside the public interest in continuing with the award of the contract as proposed.

Change: Remedies for contract modifications are now specifically referred to in the remedies regime.

Benefit: Complements the new contract modification provisions in the Act, to ensure new procurements are run whenever possible and appropriate.

2a. Types of remedies

The different types of remedies include:

1. Automatic suspension of the entry into or modification of the contract - as an interim remedy , automatic suspension protects an unsuccessful supplier’s potential to be awarded the contract (pending determination of the final remedies). If court proceedings have been commenced during the standstill period (and the contracting authority has been notified) then the new public contract or contract modification will be automatically suspended. It must not be entered into until the suspension has been lifted or the claim has been resolved.

2. (Other) Interim measures - these are orders that the Court can make for any claim while it is on-going, whether requested pre or post contract award. It could include things such as lifting or extending the terms of an automatic suspension or reversing a contracting authority’s previous decisions - for example on ‘exclusion’ or ‘down-selection’ - so that the supplier can continue to participate in the procurement. The same principles also extend to contract modifications.

3. Pre-contractual remedies - where the court has judged that there was a breach of statutory duty causing actual or potential loss or damage before the contract or modification has been entered into. Judgement may provide for the contracting authority to amend any procurement documents and/or set aside a procurement action or award decision, which could force a ‘re-run’ of the procurement. Damages may also be payable.

4. Post-contractual - If a breach of statutory duty is established after the contract or modification has been entered into, judgement will likely be the award of damages and/or an order setting aside the contract or modification (making it void). If there is an overriding public interest, the court can reduce the duration or the scope of the contract instead of rendering it entirely ineffective.

2b. Legal challenges.

Who can bring a procurement challenge?

A United Kingdom or treaty state supplier (where a treaty state supplier is given a right to participate in that particular procurement under an international agreement) can start civil proceedings in court if they have suffered, or are at risk of suffering, loss or damage as a consequence of a contracting authority failing to comply with their obligations under Parts 1 to 5, 7 and 8 of the Procurement Act 2023.

A supplier may evidence loss or damage by: .

a. demonstrating that they would or could have won the contract if the breach had not occurred (i.e. loss of profit from the future contract), being able to show they have lost the chance to compete as a result of the breach (i.e. loss of opportunity)

b. providing proof that they have wasted money participating in a non-compliant process (wasted costs).

To note: Like with any government decision, decisions made in the context of public procurement are also subject to Judicial Review (a type of court proceeding where a judge reviews the lawfulness of a decision or action made by a public body) where a breach of public law can be demonstrated. Judicial Review is a separate process that sits outside the scope of Part 9 of the Procurement Act 2023.

How are legal challenges brought?

A challenger must lodge a claim form with the courts within the time limits under the Act for starting proceedings set out in Section 106 (and also notify the contracting authority during the standstill period for the automatic suspension to apply).

What are the time limits for challenges to start proceedings?

Under Section 106 of the Procurement Act 2023, a supplier must start claims during the procurement process within 30 days of the date when the supplier first knew, or ought to have known, about the circumstances giving rise to the claim. For example, this would be the 30 days following the issuing of information that would have identified the breach of statutory duty, which puts the onus on the supplier to review the information in a timely manner.

If the claim is to set aside the contract or contract modification after it has been entered into, a supplier must start the set-aside proceeding:

a. within 30 days of the date when the supplier first knew, or ought to have known, about the circumstances giving rise to the claim and

b. within 6 months of the contract being entered into or modified (meaning in some cases the supplier will have less than 30 days).

The Court has the discretion to extend time limits where it considers there is ‘good reason’ for doing so. The extension can not be for more than 3 months after the supplier knew (or ought to have known) about the circumstances giving rise to the claim (or 6 months from the day the contract was entered into for set aside claims).

Just as under the Public Contracts Regulations 2015, the standstill period is there to enable unsuccessful suppliers to consider whether they have a potential claim before a new public contract is entered into. This is to prevent a contract being entered into following a non-compliant procurement process, and also to ensure a supplier has access to pre-contractual remedies.

“In-flight” complaints and informal challenges

Not all issues raised by suppliers during the procurement process are valid issues that require action to be taken. However, any issues raised are a key opportunity to check that the procurement is compliant with the Procurement Act 2023. The best way to reduce the risk of formal legal challenge is to give due consideration to the issue raised and take a quick stock check.

For example:

• Have all the required notices for the chosen procurement procedure been published?

• Has the process set out in the tender notice and associated tender documents been followed?.

• Have suppliers been informed in the correct way of any changes made to the procurement documents during the process and have any notices affected by such changes been amended and republished? Was the information shared to all tenderers at the same time and reasonable time to respond to any change given?

• Have the conflicts of interest assessment been completed and any identified mitigations put in place? Are there plans to review it at the next appropriate stage?

• Has the appropriate information been given to suppliers to ensure they understand key decisions, for example when removing a supplier following an interim stage of a competitive flexible procedure?

• Are appropriate records (section 98 Record Keeping) of any procurement decisions being kept in one place so they are easily accessible if required?.

• Consider how, and to what extent, you may be willing to engage with suppliers to understand and resolve any issues or concerns they may voice before legal remedies are pursued.

• In such an event, should a voluntary standstill period be adopted when a mandatory one isn’t required by the Procurement Act 2023, to mitigate against the risk of the contract or modification being set aside?

Contracting authorities should be aware that applying and adhering to a voluntary standstill can help protect against post-contractual set aside remedies, as it gives the ability for the appropriate suppliers to raise any concerns prior to the signing and commencement of a contract. This avoids contracting authorities ‘paying twice’ after the contract has been entered into for the goods and services themselves, as well as compensation for the lost value of the contract to successful challengers. On the assumption that any breach that led to an incorrect award decision would nearly always be identified prior to the contract being signed; if the standstill concludes without challenge, the supplier cannot later assert that the contract should be set aside because it was denied the opportunity for a pre-contractual remedy. Once a contracting authority decides to enter into a voluntary standstill, it operates the same as a mandatory one (i.e. the contracting authority cannot elect to end it before the 8 working days have expired).

There are many tools in the new regime you can use to reduce the risk of legal challenges

Word	Narrative
Transparency requirements	Publishing the correct notices at the right time on the central digital platform gives suppliers greater visibility of your process proposals, actions and decisions which will provide them with greater confidence that you are complying with the Procurement Act 2023. If any breaches are alleged during the procurement process the 30-day time limit for challenges will apply (meaning a supplier must raise any issues within the 30 days as they can’t challenge later).
“in-flight” complaints and informal challenges	Proper consideration of any supplier issues or concerns raised during the procurement will allow contracting authorities to identify and act upon any potential challenge risks. Where an issue or concern is accepted by the contracting authority, acknowledging transparently and making the appropriate changes mid procurement will mitigate the risk of the supplier submitting a formal challenge, avoiding additional time, cost and adverse publicity.
Standstill	Sets a small window of time (8 working days) for suppliers to formally register a challenge which reduces the likelihood of post-contractual challenges and protects the contract from set-aside orders.
Voluntary standstill	Electing to set a small window of time (a minimum of 8 working days) for suppliers to challenge, which significantly reduces likelihood of post-contractual challenges and protects the contract from set aside orders.
Following your published procurement procedure	Clearly describing your procurement process in your tender notice and associated tender documents and checking that you are administering the procurement in accordance with the procedure you have advised will mitigate against the risk of challenges in this area.
Following your published assessment methodology	Clearly setting out how your assessment methodology will be administered in your associated tender documents and then faithfully adhering to the process will mitigate against challenges in this area.
Conflict of Interest assessment	Identifying and mitigating any conflicts of interest will help remove the risk of bias, reputational damage, fraud, bribery, corruption, collusion, unfair advantages, all of which will reduce the risk of supplier challenges.
Assessment summaries	Adequate, clear, and consistent feedback for suppliers will help them understand the rationale behind the outcome of the procurement process and mitigate the risk challenges in this area.
Procurement Review Unit (PRU)	The PRU will help improve the capability and practices of contracting authorities and monitor compliance with the new procurement rules. Acting on any recommendations or guidance produced by the PRU will help reduce supplier challenges including the continued work of the Public Procurement Review Service for individual contracts.
National Security Unit for Procurement (NSUP)	NSUP will coordinate investigations of companies that may pose a national security risk. NSUP will also issue guidance on what to do when national security risk is suspected in a supplier or public sector supply chain. As with the PRU, following NSUP guidance will reduce supplier challenge in national security-related exclusion and debarment cases.
Time limits on claims	Claims for breach of statutory duty must be brought within 30 days from when the challenger knew or ought to have known about the breach. Making information available to suppliers at the earlier opportunity will commence the 30 days.
Debarment list	Identifies suppliers that must be excluded from a procurement process. As the exclusion of these suppliers is mandated by a Minister of the Crown, contracting authorities cannot be challenged for breach of statutory duty for wrongful exclusion. Note that this is not the case for excludable suppliers.
Minimum Timescales	Adhering to at least the minimum timescales specified at each stage of your procedure and ensuring that any timescales set are proportionate to the proposed procurement including the nature and complexity of the requirement.
Preliminary market engagement Notice	If you discover that some pre-market engagement has already been undertaken before the procurement team were aware of the requirement then you must a) publish this notice setting out the necessary details before you publish a tender notice, to ensure all interested parties are aware of the engagement, or b) provide reasons why you have not done so in the tender notice
Transparency Notice	Using this notice early on will inform the market that you intend to directly award a contract under sections 41 to 43 of the Procurement Act 2023 (direct award). If they have grounds, interested suppliers must raise a challenge to the award within the 30 days time limit (from when they first knew, or ought to have known, about the circumstances giving rise to the claim).The published Transparency Notice is the point they ought to have known and thus helps avoids receiving a claim, and the associated delay, at the point of contract signature including claims to set aside after the contract has been entered into.

3. Procurement Oversight

Procurement oversight is about monitoring contracting authorities’ compliance with the requirements of the Procurement Act 2023 and improving poor behaviours which affect delivery of outcomes. To enable such oversight to be extended to certain contracting authorities, statutory powers have been provided in Part 10 of the Procurement Act 2023. This is in addition to existing non-statutory powers.

Change: Expanded procurement oversight powers enabling procurement investigations to be undertaken, progress reports to be requested and recommendations made following the investigations.

Benefit: Monitoring contracting authorities’ compliance with the requirements of the Procurement Act 2023 and addressing non-compliant behaviours, as well as providing guidance for all relevant contracting authorities, will ensure the objectives of the Procurement Act 2023 are achieved to best effect by driving up standards, clarifying best practice and encouraging consistency of performance.

The Procurement Review Unit (PRU) will have non-statutory oversight of government departments and under Part 10 will now have statutory oversight of the procurement activities of relevant contracting authorities (as defined in s.108(5)) - other than devolved Welsh authorities and transferred Northern Ireland authorities which will determine how they will undertake procurement oversight. As the Minister for the Cabinet Office does not exercise non-statutory authority over contracting authorities outside of central government, it is necessary to provide specific powers in the Act to allow the Minister to investigate these contracting authorities. Conversely, Government departments are specifically excluded from the investigatory powers in the Act since Ministers already have non-statutory powers allowing them to oversee the contracting activities of government departments, and additional powers are not required. The PRU will oversee the procurement activities of relevant contracting authorities that are subject to the requirements of the Act on behalf of the Minister; all relevant contracting authorities are required to cooperate with the PRU when requested to do so.

What is the Procurement Review Unit (PRU)?

The PRU is a new team established in the Cabinet Office to exercise procurement oversight.

All contracting authorities which carry out procurement activities that are subject to the Procurement Act 2023 fall within the scope of the PRU’s purview, except:

• private utilities;

• devolved Welsh authorities;

• transferred Northern Ireland authorities.

The PRU is a new internal service and not an approvals body or a regulatory body, and it will not consider legal challenges raised under Part 9 of the Procurement Act 2023.

The aims of the PRU are to:

• ensure compliance with the new procurement legislation, including managing investigations into non-compliance by relevant contracting authorities;

• improve the capability and practices of contracting authorities for the benefit of everyone involved in public procurement;

• ensure that the outcomes intended from the transformation of public procurement are realised;

• manage non-national security related debarment investigations and maintain the debarment list .

The powers in the Procurement Act 2023, along with existing non-statutory powers in respect of central government, allow the PRU to deliver three key services on behalf of the Minister for the Cabinet Office:

1. The Compliance Service will monitor contracting authorities’ compliance with the Act, using various sources of information, including data generated by the new central platform. Main duties include:

• Reviewing the procurement landscape to identify potential breaches of the Act by contracting authorities.

• Identifying systemic and institutional breaches (to be investigated) (“systemic”^{[footnote 2]} and “institutional”^{[footnote 3]} performance of contracting authorities under the Act).

• Managing and conducting investigations into relevant contracting authorities.

• Making recommendations to the Minister following compliance investigations and issuing recommendations following the Minister’s approval.

• Publishing investigation findings.

• Issuing guidance.

2. The Debarment Service will investigate whether suppliers are fit to supply the government. Main duties include:

• Managing and conducting debarment investigations that are not related to national security.

• Delivering recommendations to the Minister to support decision-making.

• Managing supplier self cleaning oversight (as appropriate).

• Liaising with key stakeholders regarding debarment investigation outcomes and their impact / consequences.

• Managing the debarment list.

3. The existing Public Procurement Review Service will become part of the PRU and continue to investigate supplier complaints about poor practice regarding individual procurements and late payments.

Who is within Scope of the compliance service of PRU?

The PRU will oversee compliance across all contracting authorities as defined in section 2 of the Procurement Act 2023, as well as central government departments via non-statutory powers with the following exemptions

• Sections 108 to 109 only applies to “relevant contracting authorities” as defined in section 108(5).

• Section 110 allows the PRU to issue guidance to all contracting authorities but doesn’t contain any statutory enforcement powers in relation to such guidance.

When can the PRU’s compliance service investigatory powers be exercised?

The PRU can investigate a relevant contracting authority, as defined in section 108(5) of the Procurement Act 2023 at its discretion. In practice, it is expected that the PRU will act on the basis of its own analysis from data collated under the new procurement central digital platform. This will enable easier identification of systemic and institutional issues and allow attention to be focused on breaches of the Act. Data analysis and, in time, automated ‘red flags’ on the central digital platform will alert the PRU to trends - for example late or no publication of required notices from individual or multiple authorities. Alternatively, the PRU may act following referrals from stakeholders (e.g. other government departments or suppliers) or other publicly available information such as media reports.

What are the obligations upon contracting authorities being investigated by the Compliance Service?

Contracting authorities given notice must provide any relevant documents or other information the PRU may reasonably require for the purposes of an investigation. The relevant contracting authority will have to provide the requested information or documentation before the end of the period specified in the notice (which must be at least 30 days beginning with the day on which notice is given), or a longer period if that is agreed with the PRU. The relevant contracting authority must also give the PRU any other assistance that is reasonable in the circumstances and specified in the notice, for example, making contracting authority personnel available for meetings.

What happens following the PRU Compliance Service investigation?

Following an investigation the PRU may make recommendations to relevant contracting authorities which will specify: the action that it should take to ensure it complies with the requirements of the Act that are specified in the notice and the timing of such action. It is expected that this should lead to changes or improvements in the general behaviours, policies or practices of the contracting authority. For example, a revision to local guidance on the creation of award criteria, that the relevant authority undertake additional training, or implement a peer review process or better approval processes.

The PRU may request progress reports. A progress report will set out:

• what action (if any) the relevant contracting authority has taken as a result of the recommendation, or

• if no action or different action (to that recommended) has been taken, a statement to that effect including the reasons for this.

A relevant contracting authority receiving a section 109 recommendation is under a statutory duty to have regard to such recommendations when considering how to comply with the requirements of the Procurement Act 2023

Whilst government departments do not fall within the PRU’s investigatory remit under Part 10 of the Procurement Act 2023, where the PRU investigates and issues recommendations to a department utilising non-statutory Ministerial powers, those recommendations should be considered just as seriously as section 109 recommendations and departments will be expected to respond in the same way.

The PRU may issue statutory guidance following an investigation which all contracting authorities must have regard to when considering how to comply with the requirements of the Procurement Act 2023. This may be in addition to the targeted recommendations to a particular contracting authority or used instead, where targeted recommendations are not considered necessary.

The Public Procurement Review Service which will become part of the PRU in due course can continue to make non-binding recommendations to contracting authorities regarding a particular procurement, for example, during a “live” procurement exercise, as to how those shortcomings might be resolved immediately. These recommendations are not made under powers provided by the Procurement Act 2023 and are both non-statutory and non-binding in nature, so there is no duty to have regard to them.

How should contracting authorities plan to ensure any requests received from the PRU can be dealt with swiftly and smoothly?

• Ensure colleagues understand the obligations and requirements set out in the Procurement Act 2023 and comply with those when undertaking procurement and contract management activities.

• Keep all procurement records up to date and stored so they are easily retrievable by the team managing the procurement and the wider organisation.

How does the Debarment Service part of the PRU work?

Debarment is a new mechanism aimed at identifying suppliers who are, or may be, unsuitable to bid for public contracts. Individual contracting authorities must decide in relation to each covered procurement whether a supplier should be excluded, including by reference to the debarment list. Only a Minister of the Crown can put a supplier on the debarment list.

The PRU may seek information and assistance from other departments and stakeholders during debarment investigations where they hold relevant information or expertise. The National Security Unit for Procurement (NSUP) will undertake debarment investigations in relation to the national security exclusion grounds. Following an investigation, the PRU (or the NSUP where the investigation relates to a national security exclusion ground) will submit advice to support a Ministerial decision on whether or not to add a supplier to the debarment list.

What is the NSUP?

• As a result of the new national security-related provisions within the Act, the Government has established the NSUP, which will coordinate the investigation of suppliers who potentially pose a national security threat to the public sector. Ministers will have the power to exclude suppliers from bidding for public contracts (or identify them as being excludable by contracting authorities) by placing them on a debarment list on national security grounds.

• The National Security Unit for Procurement (NSUP) will coordinate the assessment of companies for debarment The Unit will receive referrals, but will also be taking a proactive approach to identifying suppliers where national security risk could arise in public contracts, and these cases will also be put to the relevant minister. The Unit will support ministers in their debarment decisions by providing advice on each case.

What are the objectives of the NSUP?

• The NSUP will serve as a hub to bring together national security and procurement expertise and will coordinate the investigation of suppliers who may pose a national security risk. This will enable the Government to deliver on its national security agenda by acting on national security risks emanating from public sector suppliers.

• This will ensure that the UK remains secure and prosperous, protecting the public sector, and critical services.

• As the global threat landscape evolves, the NSUP will enhance the resilience of our public services by anticipating and mitigating against emergent risk.

Who is within scope of the NSUP?

• The debarment regime has a broad scope and allows Ministers to investigate any supplier to determine whether they are an excluded or excludable supplier and should be added to the debarment list. NSUP will be responsible for the investigation of suppliers who may be excluded or excludable for national security reasons. It will also deal with referrals from contracting authorities who are considering excluding a contracting authority on the discretionary national security exclusion ground

• The NSUP’s activities will be focused on cases where the national security risk is most acute, across all relevant sectors.

How will the NSUP support contracting authorities? What will be the referral process?

• The NSUP will be publishing advice and guidance for contracting authorities, which will detail where national security concerns may arise. This will include when and how to refer cases to the NSUP under Section 29 of the Act and how to notify NSUP of suppliers that may warrant investigation for debarment.

National Security debarments

• Under the Procurement Act 2023, contracting authorities have to exclude suppliers which are on the debarment list under the mandatory national security exclusion ground and will be encouraged to consider excluding suppliers which are on the debarment list under the discretionary national security ground.

4. Debarment List

What is the Debarment list?

The debarment list is a published list of excluded (where a mandatory exclusion ground applies) or excludable (where a discretionary exclusion ground applies) suppliers. They will be added to the list if a Minister of the Crown makes such a decision following an investigation.

The decision to add a supplier to the list would be because the investigation found them to be unfit or potentially unfit to tender and be awarded public contracts, because a mandatory or discretionary ground for exclusion applies and the circumstances giving rise to that ground are continuing or likely to occur again (taking account of self-cleaning undertaken by the supplier and other relevant factors).

Change: A new single, accessible, public debarment list, containing suppliers who must be excluded from competing for future covered procurements or who contracting authorities have a discretion to exclude. The debarment list will list both “excluded suppliers” (where a mandatory exclusion ground applies) and “excludable suppliers” (where a discretionary exclusion ground applies).

Benefit: Investigations using the right expertise and experience on the worst cases of supplier misconduct will reduce the burden on contracting authorities and the possibility that unsuitable suppliers will be awarded public contracts.

Debarment investigations can be carried out by a Minister of the Crown, Welsh Ministers or a Northern Ireland department. Where the investigation is carried out by a Minister of the Crown then this will be conducted, in most cases, by the debarment service of the PRU. The PRU will also manage the debarment list. Only a Minister of the Crown can add a supplier to the debarment list, following an investigation.

Contracting authorities must^{[footnote 4]} exclude suppliers which are on the debarment list from all covered procurements where the exclusion ground is mandatory (or for the particular type of procurement listed where the mandatory national security ground applies) . They will have discretion on whether or not to exclude a supplier if the exclusion ground is discretionary.

The debarment list will not replace the supplier exclusion regime, but will sit alongside it as an additional protection against unfit suppliers. Contracting authorities will retain responsibility for assessing all suppliers against the mandatory and discretionary grounds for exclusion on a contract-by-contract basis. Exclusions will continue to be possible where the supplier is not on the debarment list, provided the contracting authority is satisfied that the supplier meets a ground for exclusion and the circumstances giving rise to the ground are continuing or likely to occur again. If a supplier is excluded they should be notified, in writing, as soon as reasonably possible. In certain cases, suppliers must also be notified of an intention to exclude, for example if an exclusion ground applies to a sub-contractor.

Who is In Scope to be on the debarment list?

Any supplier can be investigated and added to the debarment list, including:

• Public and private limited companies

• Small and medium sized enterprises (SMEs)

• Individuals acting as sole traders

• Suppliers from outside the United Kingdom

• Sub-contractors

• Suppliers which are themselves contracting authorities

• Suppliers which are not currently delivering or have never delivered a public contract

The grounds for suppliers being added to the debarment list are the same as the mandatory and discretionary exclusion grounds as apply for contracting authorities when considering exclusion as part of the procurement processes. See summary document 6 for further details.

How will suppliers be added to the debarment list?

The PRU or NSUP may initiate an investigation based on its own knowledge about potential supplier misconduct or from referrals by third parties. Routes for consideration include:

The CO’s own knowledge of and / or research into a supplier, e.g. Data analysis from contract performance notices on the central digital platform or through information obtained from national and international partners about convictions, regulatory rulings or security risk.

Referrals by third parties bringing cases to the PRU’s attention. Referrals may come from:

• Contracting authorities - as per their duty to notify the PRU within 30 days of any supplier exclusion and seek ministerial approval before excluding a supplier on the grounds of national security.

• Contracting authorities - may choose to refer any supplier to the PRU where they suspect an exclusion ground may apply (including where no contract exists)

• Members of the public, non-government organisations, other suppliers and the media may take steps to bring a supplier to the attention of the PRU.

The PRU will have the powers to:

• Ask questions and request information and assistance from suppliers

• Require, after giving notice, information and assistance from contracting authorities

• Review supplier self-cleaning evidence and representations

• Add and / or remove suppliers from the debarment list following a decision from the Minister of the Crown

Before a supplier’s name is added to the list, a standstill period of eight working days must be observed. This starts the day a notice is sent to the supplier setting out the decision to add them to the list, the justification for the decision and an explanation of the supplier’s right to appeal.

Reports relating to debarment investigations must be published unless it is necessary to withhold publication to safeguard national security and/or prevent the publication of sensitive commercial information (where there is an overriding public interest in it being withheld from publication or other disclosed).

Format and Maintenance of the Debarment List

The debarment list will be published and updated, information on the list will include:

In relation to debarred suppliers

• Supplier name

• The relevant mandatory or discretionary ground(s)

• The date that the supplier is expected to be removed from the list

The PRU will be responsible for maintaining the list, including removal of suppliers on expiry of the five-year period (from when the event occurred), if the exclusion ground no longer applies or if self-cleaning is considered to be adequate, or if the supplier is successful following an application for removal or an appeal.

Length of debarment

Suppliers who have been put on the debarment list will remain on the debarment list for the length of time for which the exclusion ground applies and there is a risk of recurrence or five years^{[footnote 5]} from either:

• For mandatory grounds:

  - The date on which the supplier was convicted of the misconduct / offence (if applicable), or

  - The date on which a regulatory ruling was handed down (if applicable), or

  - The date on which misconduct occurred (if debarment relates to specific events), or

• For discretionary grounds, the date on which the Minister became aware of, or ought to have become aware of, the event

For example, this means that if a debarment decision in respect of a conviction is made three years after the supplier was convicted, the supplier will remain on the debarment list for a maximum of two years.

How will contracting authorities use the debarment list?

For any covered procurement, contracting authorities will:

• Check the debarment list and exclude a supplier from participating in a competitive flexible procedure / disregard their tender in all competitive tendering procedures where they are on the debarment list for a mandatory exclusion (excluded supplier)

• Check the debarment list and decide whether to exclude a supplier from participating in a competitive flexible procedure / disregard their tender in all competitive tendering procedures where they are on the debarment list for a discretionary exclusion (excludable supplier).

• Check the debarment list for a supplier’s associated persons and act accordingly. This does not replace the contracting authorities’ responsibility to assess exclusion grounds.

• Notify the Minister of the Cabinet office (via the PRU) - or the Welsh Ministers or Northern Ireland department for devolved authorities - in the event that a supplier is excluded from a procurement (except where the supplier was excluded by virtue of being on the debarment list on a ground - other than the mandatory national security ground).

What does this mean for existing contracts?

There is no requirement to terminate an existing contract if a supplier is added to the debarment list after a contract is awarded.

For existing contracts that were awarded under previous regulations, contracting authorities may have contractual rights to terminate the contract if the supplier has committed misconduct.

If a supplier is added to the debarment list after a contract is awarded under the new rules, that contract will contain implied rights to terminate the contract. If the supplier is put on the debarment list for the mandatory national security ground, contracting authorities must follow the process for Ministerial approval as set out by the National Security Unit for Procurement before terminating the contract. Further guidance will be provided by the National Security Unit for Procurement.

What does this mean for suppliers who are not put on the debarment list following an investigation?

The Minister of the Crown’s decision to not put a supplier on the debarment list will be final. This means that contracting authorities must accept the decision made and should not exclude the supplier for the specific circumstances that have been investigated. They can only exclude a supplier for a different set of circumstances or if the original situation has changed since the decision not to put a supplier on the debarment list.

Supplier Appeals and Applications for removal

A supplier may appeal the decision to add them to the debarment list and the decision will be overturned if they are successful in appeal. Suppliers can also apply to a Minister of the Crown for removal from the list.

Appeal

Suppliers are entitled to appeal debarment decisions, whether that’s the decision to enter their name onto the list following a debarment investigation or the decision not to remove their name from the list following an application for removal.

If a Minister of the Crown decides a supplier’s name should be added to the list, the supplier will be notified and an eight day standstill period will commence. The supplier may apply to the courts for suspension of the decision in which case a court can suspend the supplier’s name being added to the list until:

1. The 30 day period to appeal has passed if the supplier has not initiated formal proceedings;

2. Appeal proceedings are complete.

If a supplier does not apply for the decision to be suspended within the eight day standstill period, they may still apply to the Court to appeal the decision within 30 days of being notified of the decision. If, following proceedings, the supplier is successful, the court may make an order to set aside the decision and/or may award lost bid costs if the supplier has been excluded from a procurement as a result of the debarment decision.

Application for removal

Suppliers who are on the debarment list are entitled to apply to have their name removed from the list at any time. Their request would be submitted to the Minister of the Crown, who must only consider the request if there has been a material change of circumstance or there is significant new information, for example they can demonstrate new self-cleaning evidence, e.g. where a conviction or ruling has been overturned, a Director or beneficial owner has left their position, or where new processes have been put in place.

What will suppliers need to do?

Cooperation with the PRU and NSUP: There is no statutory legal obligation for suppliers to cooperate with a PRU or NSUP investigation but, given the importance of the debarment list in managing risk to public contracts, a new mandatory exclusion ground has been introduced that will mean suppliers can be added to the debarment list and must be excluded from all procurement processes if they fail to cooperate without reasonable grounds/justification and the Minister considers the failure was sufficiently serious to warrant mandatory exclusion.

Tender for new contracts: Suppliers under investigation may still participate in procurements and be awarded contracts.

Understand their right to appeal a debarment decision if they think it is incorrect, or apply for removal from the debarment list if they have a change in circumstances.

61. Remedies: Fact sheet

In the context of public procurement, remedies are available to United Kingdom or treaty state suppliers (where a treaty state supplier is given a right to participate in that particular procurement under an international agreement) that suffer, or are at risk of suffering, loss or damage as a consequence of a contracting authority failing to comply with their obligations under parts 1 to 5, 7 and 8 of the Procurement Act.

Automatic suspension

Automatic suspension is:

• only applicable during the mandatory or any voluntary standstill period

• triggered if court proceedings are are commenced and the contracting authority has been notified of that fact during the standstill period

Automatic suspension principles apply to any mandatory or voluntary standstill periods (which must always be no less than 8 working days) regardless of procedure e.g. tender, modification, contract change notices, or converting contracts.

The automatic suspension will remain in place until the court terminates the suspension (if the contracting authority applies for it to be lifted), or the proceedings come to an end.

Interim remedies

Interim remedies:

• can be applicable to any claim pre or post contract or contract modification

• are applied by the court before the outcome of the claim has been decided

More than one interim remedy can be applied in each case.

Remedy orders include:

• lifting or modifying the award of a contract

• extending or adding similar restrictions

• suspension of any decision or action of the contracting authority in carrying out the procurement

Transforming Public Procurement

• suspension of entry into or performance of a contract

• suspension in the making of a modification of, or the performance of that contract

Pre-contractual remedies

Pre-contractual remedies are applicable to a claim that is resolved prior to a contract, contract modification or convertible contract being entered into.

If successful the judgement could be:

• a set aside decision (a decision made during the procurement process)

• a take action decision

• award of damages

• any other order the court considers appropriate

Post-contract remedies

Post-contract remedies are applicable to a claim following the award of a contract, modification or convertible contract, that has been entered into.

If a claim is successful the judgement could be:

• a set aside decision

• the award of damages

Time limits

A supplier has 30 days from when it first knew or should have known, about the breach to raise a claim for breach of statutory duty.

The set aside post contract or modification remedy has the same 30 days time limit. However, in cases where a contract details notice has not been published, a 6 month window is available to make a remedies claim. This 6 month window also applies to contract modifications where a contract change notice has not been published.

Useful terms to know

Automatic suspension test

A procurement specific test where the court consider all the merits of the case, including the public interest in upholding the duties in the Procurement Act. Amongst other things the court will consider, preventing unnecessary delay to delivering the public service, the contract and if damages is an appropriate remedy for the claimant (if their claim is successful). The court will use the same test to decide whether to make any interim injunctions.

Breach of statutory duty

When a contracting authority does not comply with an obligation set out in the Procurement Act.

Civil/court proceedings

The process which must be initiated by the claimant for court to review the evidence and decide whether a contracting authority has breached its statutory duty.

Claimant

The supplier/person that has submitted a claim to the courts.

Damages

A monetary award to a successful claimant to compensate for loss/damage. For example, to recover expected profits lost as a result of the contract being wrongly awarded to another supplier. The court will determine the appropriate value to award having considered the circumstances of the breach and actions the claimant could have reasonably taken to mitigate their loss.

Set aside

An order the court makes to reverse and void a decision or action that has already been taken by the contracting authority, for example where the court has determined that a supplier has been unlawfully excluded from a procurement and sets aside the exclusion decision, it will require the contracting authority to proceed with the supplier included as one of the tenderers. It could also be an order to cancel the contract or contract modification with effect from the date of the order and to re-run the whole competitive process again.

Take action decision

An order the court makes that requires the contracting authority to do something. For example, where the contracting authority has wrongfully applied the award criteria the court may require the contracting authority to re-evaluate tenders.

64. Mitigating potential challenges: Checklist

The remedies system is there to provide the appropriate redress if a contracting authority breaches its obligations to comply with parts 1 to 5, 7 and 8 of the Procurement Act 2023:

• part 1 - key definitions

• part 2 - principles and objectives

• part 3 - award of public contracts and procedures

• part 4 - management of public contracts

• part 5 - conflicts of interest

• part 7 - implementation of international obligations

• part 8 - information and notices: general provision

If you receive a concern, issue or threat of challenge from a supplier here are a few things to check to help you mitigate the risk of a challenge from a potential breach before taking your next procurement procedure step.

Please note not all will be applicable to your procurement.

Issues raised during the procurement process (including standstill period)

1. Did you classify your procurement correctly and are adhering to the correct obligations (contract type, contract value, above or below-threshold, applicable exemptions)?

2. Did you set appropriate time limits which are equal to or exceed the minimum periods set out in the regulations?

3. Did you consider whether a supplier is an excluded or excludable supplier and removed any excluded suppliers from the procedure?

4. Did you carry out conflicts of interest obligations?

5. Is your award criteria clear and measurable and well defined in a way that the broadest range of suppliers could understand the methodology adopted?

6. Did you clearly set out your procedure in the tender notice / associated tender documents and are carrying it out in accordance with the stated proposal?

7. If required, did you make all information available to all suppliers, including the outcome of any pre-market engagement at the same time?

8. Have you been treating all suppliers the same unless a difference between the suppliers justifies different treatment?

9. Have you dealt with all clarifications promptly and clearly and was the appropriate response(s) published to all participants at the same time?

10. Have you published all of the required notices on the central digital platform?

11. Have the assessment panel been fully briefed and understand their duties when assessing tenders (i.e. feedback, justification for scores, no contact with suppliers etc)?

12. If you have modified or refined your award criteria during the process, did you follow the correct procedure?

13. If you are awarding a contract from an existing framework or dynamic market, are you following the applicable framework or dynamic market requirements?

14. Have you issued your assessment summaries to suppliers before publishing the contract award notice and starting the standstill period?

15. Have you calculated the correct period of standstill ‘working days’ for inclusion in the published contract award notice?

16. Are you keeping the appropriate records sufficient enough to explain any material decision made for the purpose of awarding or entering into a public contract?

17. Have you shared the content of any potential challenge with the correct internal stakeholders as legal advice may be required?

18. Have you considered contingencies e.g. what will be the service repercussions as a result of delays? What are the options available if the procurement stalls or isn’t completed within a given time? Can extensions, if required during a rerun of the procurement, be accommodated by the existing supplier?

1. The conventional test applied in England and Wales for interim injunctions. It involves 3 stages; 1. Whether the claim raises a serious issue to be tried 2. Whether damages are an adequate remedy (a) for the claimant and (b) for the defendant 3. Whether the balance of convenience, which includes the interests of both parties and the public interest, favours an injunction or not. ↩

2. breaches common across numerous contracting authorities ↩

3. breaches that are regularly being made (or are anticipated to be made) by one particular contracting authority due to their policy, practice, or beliefs (e.g. about what the procurement law entails) that has been established throughout the contracting authority ↩

4. Exemptions apply ↩

5. Shorter time periods apply in certain cases. ↩