The UK arm of Bain & Company can once again bid for Whitehall contracts after ‘robust and intensive dialogue’ with government, minister claims
A major technology and business consultancy firm’s three-year ban on bidding for government contracts has been lifted after less than eight months.
In August, then-Cabinet Office minister Jacob Rees-Mogg announced that Bain & Company was to be prohibited from bidding for government work for a period of three years in light of its role in a South African corruption scandal.
In a U-turn, new Cabinet Office minister Jeremy Quin announced this week that only the South African arm of Bain will remain excluded from bidding for UK government business. He said this was due to the progress the company has made in recent months.
“Following robust and intensive dialogue with Bain & Company since the exclusion decision was made in August, which has received the full cooperation from the company, we have concluded that Bain & Company, Inc. and its affiliates outside of South Africa…can bid for UK government work,” Quin said in a ministerial statement.
He added thay this includes both Bain & Co UK and BuyingTeam Limited, a subsidiary which trades as Proxima.
The minister said the Cabinet Office has received full cooperation from the company, which has “produced detailed evidence of the measures they have taken internally – including related to the way Bain & Company handles bids for UK government work – which was not available to the Cabinet Office previously”.
The decision to lift the ban is subject to a regular and thorough period of close monitoring, for a minimum of two years, “so we can be satisfied that the company continues to uphold the measures they have now put in place”, Quin said.
During this monitoring period, Bain has agreed that it will continue to provide evidence to the Cabinet Office that its governance, organisation and internal processes are now working, the minister added.
Quin said Bain has “welcomed this robust external challenge, to help ensure that going forward their governance is of a consistently high standard, that the self-cleansing actions put in place are operational and that any new issues arising are being managed and communicated transparently”.
A spokesperson for Bain said: “We welcome the decision to reinstate Bain & Company as a trusted supplier to the UK government.”
In his ministerial announcement, Quin also warned bidders, adding: “We strongly condemn corporate malpractice and will not hesitate to exclude suppliers should they be found to not be upholding the highest standards.”
Bain & Co South Africa remains excluded from bidding for UK government procurements until 4 January 2025. Quin said Bain has apologised for the fact that its South African arm contributed to damaging a critical public institution and acknowledged that its cooperation with investigating authorities fell short.
A South African inquiry last year examined the role of Bain and other suppliers in supporting the restructuring of the national tax agency: the South African Revenue Service (SARS). The inquiry found that Bain acted “unlawfully” and, along with other private-sector companies, colluded in “the clearest example of state capture” – a term applied to the exertion by businesses of undue influence or control on the policy or operations of the state.
The South African government joined the UK in banning the company from bidding for contracts in September, but with a stronger 10-year prohibition.
Prior to its ban, Bain – whose core specialisms include IT infrastructure and digital transformation – had won an array of major contracts with UK government departments and other public bodies.
Its engagements included providing significant consultancy support in relation to EU Exit work and fulfilling advising on transformation programmes at both HM Revenue and Customs and the then Department of Digital, Culture, Media and Sport.
The firm is considered one of the ‘big three’ consulting organisations, alongside McKinsey and Boston Consulting Group.
With global annual revenues of about $6bn, in the 2021 calendar the firm posted UK revenues of £271.9m, according to filings with Companies House.
UK government accused of ‘cop-out’
Peter Hain, a Labour peer and veteran anti-apartheid campaigner who was instrumental in convincing the UK government to enforce the procurement ban, said that its subsequent U-turn was “very disappointing”.
The former cabinet minister told South Africa’s Radio 702: “It’s a complete cop-out because Bain have not fundamentally changed anything.”
Hain said the government has “obviously given in to a lot of fine words and soft soaping”.
In a statement following the UK government’s decision, Bain & Co South Africa’s managing partner Stephen York said the firm had “made mistakes” but “there is no evidence that Bain colluded with SARS or engaged in any corrupt and fraudulent practices”.
Hain argued these were not mistakes but a deliberate effort to undermine one of the key institutions in South Africa that should be punished.
“That’s not just reprehensible, it deserves to be punished, which has worked for a brief period,” he said. The British government to its credit did and has now flipped on its head and withdrawn that.”
Hain said Bain should “feel the pain” for actions that “have damaged the whole fabric of the country in South Africa”.
Bain & Co South Africa’s York said the business’ ongoing exclusion from bidding for UK contracts was “regrettable” but “a decision that we will respect”.
He said the new Bain South Africa leadership was “confident that the comprehensive actions taken by the firm locally and globally will ensure that we never repeat our past mistakes – in South Africa or elsewhere”.