Procurement in a Nutshell – Procurement Act 2023 Guidance: Verification of Exclusions and Self Cleaning

Please see our previous publications on the exclusion regime under the Act here. The guidance referenced throughout can be found here.

Introduction

The Procurement Act 2023 is expected to come into force on 24^th February 2025.

The Act will, in particular, revoke the following:

• Public Contracts Regulations 2015 (PCR)
• Concession Contracts Regulations 2016
• Utilities Contracts Regulations 2016

Self-cleaning

Section 58 outlines the factors a contracting authority should consider when establishing whether the circumstances giving rise to the application of an exclusion ground are continuing or likely to occur again.

These include:

1. Evidence that the supplier, associated person or connected person has taken the circumstances seriously
2. Steps that the supplier, associated person or connected person has taken to prevent the circumstances occurring again, for example by changing staff or management, or putting procedures and training in place
3. Commitments that such steps will be taken, or to provide information or access to allow verification or monitoring of such steps
4. The time that has elapsed since the circumstances last occurred
5. Any other evidence, explanation or factor that the authority considers appropriate.

When asking for evidence or information, the contracting authority must ensure such requests are proportionate based on the nature and complexity of the matters being assessed, and the design of the procurement.

It is for the supplier to demonstrate it has self-cleaned and this must be to the satisfaction of the contracting authority, taking into account the gravity and particular circumstances giving

rise to the ground for exclusion. The guidance notes that suppliers can be asked to pay for an independent audit of self-cleaning action if the contracting authority deems this proportionate, reasonable and necessary.

Furthermore, contracting authorities should ensure there is a robust mechanism for monitoring the implementation of any commitments made by the supplier, especially if these are a significant factor in the decision that a supplier is not an excluded or excludable supplier.

Verifying exclusions

The guidance states that contracting authorities should ask suppliers for the following information (among others), which should be submitted with their requests to participate in a competitive flexible procedure:

• Self-declarations as to whether any mandatory or discretionary exclusion grounds apply to the supplier, connected persons or associated persons
• Where the supplier self-declares that an exclusion ground applies
  • Which exclusion ground applies
  • A short description of the event giving rise to the exclusion ground
  • The name of the person who is the subject of the event
  • In the case of a conviction, a copy of the decision
  • Any evidence that the person who is the subject of the event took the event seriously, for example by paying any fine or compensation
  • Evidence that preventative steps were taken for example by changing staff or management.

Information about the supplier and connected persons must be provided by the supplier via the central digital platform before the end of the tendering period. However, it is possible for a contracting authority to obtain this information directly if, for example, the contracting authority will need this information in order to consider exclusions at the invitation to participate stage in a competitive flexible procedure.

The guidance states that it is best practice to encourage associated persons and sub-contractors to register on the central digital platform in order to gain a unique identifier so that the supplier can provide their information via the platform as well.

It is advised that contracting authorities undertake further due diligence where the contract raises particular risks.

What does this mean?

The Act affords contracting authorities flexibility to assess evidence of ‘self-cleaning’ by suppliers when conducting their due diligence. It is advised that contracting authorities thoroughly review their due diligence procedure prior to February 2025, to ensure they can adequately assess prospective suppliers prior to, and during, a procurement exercise. This will minimise disruption later in the procurement process, and also guarantees compliance with the objectives of the Act, namely acting with integrity and being transparent.

For further information please contact Melanie Pears or Tim Care in our Public Sector Team