Public procurement: Exclusion and debarment on competition grounds

As of 24 February 2025, the Procurement Act (PA23) has strengthened the powers of contracting authorities to exclude suppliers from taking part in public procurement. Please see our blog for a general overview of the new rules on exclusion.  This note focuses on the exclusion grounds relating to competition law infringements which include mandatory exclusion of suppliers who have been involved in cartel activity and discretionary exclusion in the case of other competition infringements or potential infringements.

Debarment

A supplier may be placed on a central debarment list by a Minister of the Crown. This will prevent the supplier from participating in any covered procurements or being awarded public contracts for up to five years. The Procurement Review Unit (PRU) will manage this list and publish it on GOV.UK. Suppliers will only be considered for debarment after an assessment of the exclusion grounds listed below.

Mandatory and discretionary exclusion

The term 'exclusion' refers to a supplier not being permitted to participate in a tender, or to be awarded a public contract, following an assessment of exclusion grounds by a contracting authority (CA).

There are two types of competition exclusions that can occur under the PA23: mandatory (Schedule 6 of the Act) and discretionary (Schedule 7 of the Act). Exclusion from public contracts on competition law grounds can occur in the following circumstances:

Steps suppliers may take to avoid exclusion or debarment

In order to determine whether suppliers are excluded under the PA23, it is important to assess whether the circumstances causing the exclusion are ongoing or likely to reoccur. Section 58 of the PA23 sets out a number of different factors that CAs should have regard to when evaluating whether the supplier has "self-cleaned":

1. evidence that the supplier, associated person or connected person has taken the circumstances seriously, for example by paying compensation;
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; and
5. any other evidence, explanation or factor that the authority considers appropriate.

Seeking and obtaining leniency and/or entering into a settlement agreement with the CMA (under the Competition Act 1998) may serve as relevant evidence that a supplier has seriously addressed the factors leading to their exclusion. Additionally, being the first to report under the CMA's leniency policy can help to avoid exclusion for suspected cartel activity.

Suppliers should be aware that they could be subject to exclusion if an associated person or a connected person is subject to a mandatory or discretionary exclusion ground. 

• An associated person is a person that a supplier relies on to meet the conditions of participation in a procurement. For example, if a prime contractor with no record of competition infringements engages a sub-contractor that has been involved in cartel activity for the purpose of bidding for a public contract, the prime contractor could be excluded from the procurement. In such cases the prime contractor would have to be given the opportunity to replace the sub-contractor before exclusion. Bidders for public contracts would be well advised to check in advance of tendering whether their key sub-contractors are subject to any exclusion grounds. 
• A connected person is anyone who controls or is controlled by the supplier, such as a parent or subsidiary company, as well as directors and shadow directors.  So, for example, a supplier that is a UK subsidiary of an international group would potentially be subject to mandatory exclusion if its parent company had been fined by an overseas competition authority for participation in a cartel.  In such case, demonstrating "self-cleaning" measures will be key.

Steps for contracting authorities

Prior to awarding public contracts, CAs must determine whether exclusions apply to potential suppliers including assessing whether a supplier has "self cleaned". To assist with the decision, the CA can:

1. check the central debarment list on GOV.UK before procurement exercises;
2. check the CMA decisions register for infringement decisions;
3. check for ongoing investigations in the CMA case list;
4. contact the CMA by emailing cma_procurementsupport@cma.gov.uk to confirm whether:
   1. a supplier is an immunity recipient;
   2. an infringement was through participation in a cartel (if it is not clear from the published decision);
   3. there is any additional information that can help determine whether the discretionary exclusion grounds apply when a supplier is or may be under investigation; and
   4. a supplier has been granted leniency and/or entered into a settlement agreement for the purposes of self-cleaning assessments.

The CMA has also published some helpful guidance to assist "public sector procurers" with suspected bid-rigging.

If your organisation (whether a contracting authority or supplier) requires any advice in relation to the PA23, please contact Nick Pimlott or Holly Johnson.

The content of this blog does not constitute legal advice and is provided for general information purposes only. Specific legal advice should be sought before taking any actions based on the content of this blog.