Procurement in a Nutshell – Guidance: Exclusion and Debarment on competition grounds
14th March, 2025
This Nutshell will evaluate the recent guidance released by the Competition & Markets Authority (CMA) relating to how competition law infringements interact with the exclusion and debarment regime introduced by the Procurement Act 2023.
The Procurement Act 2023 came into force on 24th February 2025.
The Act, in particular, revoked the following:
- Public Contracts Regulations 2015 (PCR)
- Concession Contracts Regulations 2016
- Utilities Contracts Regulations 2016
Key terminology
An ‘excluded’ supplier is a supplier to which a mandatory exclusion ground applies, and thus a contracting authority must prevent their participation in the procurement. An ‘excludable supplier’ is a supplier to which a discretionary exclusion ground applies, and therefore a contracting authority has discretion as to whether they are excluded from the procurement.
The debarment regime enables the Government’s Procurement Review Unit (PRU) to place suppliers on a centrally published debarment list, which will prevent the supplier from participating in any covered procurements. A supplier can only be considered for debarment if any of the mandatory or discretionary exclusion grounds apply.
Suppliers should note that they may be excluded from public procurement contracts if an exclusion ground applies to a ‘connected’ or ‘associated’ person. This can include directors, parent or subsidiary companies, and key sub-contractors.
Please see our Nutshell on the Exclusion Regime and Debarment for a more detailed evaluation of the new legislative provisions.
Mandatory exclusion
The guidance states that a mandatory exclusion will apply when:
- The CMA (or another applicable regulator) has found a supplier to have breached competition law by taking part in cartel activity (which includes colluding with competitors to rig bids, fix prices or share markets), or has been convicted of the criminal cartel offence under the Enterprise Act 2002; and
- These circumstances are continuing or likely to occur again.
Discretionary exclusion
It is noted that a discretionary exclusion will apply when:
- A contracting authority or Minister considers that a supplier has engaged in cartel activity, anti-competitive agreements and or excessive or discriminatory pricing; and
- These circumstances are continuing or likely to occur again.
Self-cleaning
Determining whether the mandatory or discretionary competition exclusions apply to a supplier requires an assessment of whether the circumstances giving rise to the exclusion ground are continuing or likely to occur again. This involves an assessment of whether the supplier has ‘self-cleaned’.
The Act sets out a number of factors a contracting authority or the PRU can take into account when assessing whether a supplier has self-cleaned including any preventative steps that the supplier, associated person or connected person has taken such as ensuring adequate training in place.
The guidance notes that applying for and being granted leniency and/or entering into a settlement agreement with the CMA under the Competition Act 1998 may be relevant evidence that a supplier can introduce for the purposes of the self-cleaning assessment.
Furthermore, it is important to stress that if a supplier is the first to report cartel activity to the CMA, and is granted a 100% discount on any financial penalty under the CMA’s leniency policy, they will not be excluded from public procurement or appear on the central debarment list.
What does this mean?
Contracting authorities will need to carefully assess whether suppliers involved in competition law violations should be excluded from procurement based on mandatory or discretionary grounds, considering whether the circumstances are ongoing or likely to recur. They will also need to evaluate whether suppliers have taken sufficient steps to “self-clean,” such as implementing corrective measures or cooperating with the CMA.
For further information please contact Tim Care or Melanie Pears in our Public Sector Team.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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