Cabinet Office proposes banning firms that have failed to deliver previous projects on time and within budget

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Technology companies with a track record of poor delivery, fraud or corruption could be blocked from winning public contracts under plans to toughen up procurement rules.

The Cabinet Office this announced plans to introduce new powers which will allow it to exclude suppliers across sectors from winning public contracts if they have previously failed to deliver projects on time or on budget.

The proposed reforms will see hundreds of “complicated and bureaucratic” European Union procurement rules torn up, with “simpler, clearer and more flexible rules put in place”, the department said. 

Suppliers can also be banned if they have engaged in unethical practices, such as a lax approach to safety, or if there are national security or environmental concerns.

Under the current rules, suppliers can only be excluded from winning new government deals if there has been a significant breach of contract.

The plan to broaden the grounds for exclusion was published as part of a government response to a consultation on its procurement green paper.

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The consultation, which ran from last December to March, sought feedback on a number of proposals intended to speed up and simplify tendering processes, ensure contracts provide value for money, and make procurement more accessible to small business, charities and social enterprises.

The government indicated that many respondents found the existing regulations unclear and confusing, highlighting uncertainty around: the scope of some of the current grounds for exclusion; the individuals and entities covered by the regime; and the process to be followed to verify self-declarations.

All consulted stakeholders raised concerns, but contracting authorities, who have responsibility for considering the exclusion of suppliers from procurements on a case-by-case basis, were particularly worried.

The proposed new exclusions framework was published in response to the feedback and aims to simplify the regulations while focusing on excluding suppliers who “pose an unacceptable risk” to effective competition for contracts, reliable delivery, the public, the environment, public funds, national security interests or the rights of employees.

The new legislation is unlikely to come into force until 2023 at the earliest.

Increasing transparency
The green paper also includes plans to make public contracts more transparent. These plans were supported by more than 90% of respondents, although some raised concerns around the parameters of transparency and the potential burden it could place on contracting authorities, which they said could slow down processes and decision making.

In response, the government said it will ensure the transparency requirements are proportionate to the procurements being carried out and are simple to implement.

Cabinet Office minister Steve Barclay said: “Leaving the EU gives us the perfect chance to make our own rules for how the government’s purchasing power can be used to promote strong values. While doing so we’re increasing transparency and ensuring that procurement remains fair and open.

He said the “simpler and more flexible rules” would also make it easier for small businesses to win work.