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Corrupt Bidders

Crown Commercial Service

Estimated Completion, not stated

Debarment, often referred to as 'blacklisting' or 'exclusion', is the legal process by which companies, or individuals, are excluded from certain privileges and practices, as a result of wrongdoing (e.g. corruption, bribery, money laundering, collusion, terrorist financing, criminal enterprise, and fraud). A defence company that is 'debarred', for example, is effectively disqualified from winning government contracts. Depending on the debarment system in place, a state might alternatively choose to temporarily 'suspend' a company/individual from certain privileges. In the event of suspension, a company can potentially regain privileges through specified 'self-cleaning' measures. Globally, exclusion systems vary from 'mandatory', as in the EU, to 'highly discretionary' exclusion systems, as in the US. The offenses sufficient to trigger 'debarment' vary by country and, in some cases, by sector - depending on market concentration and assessments of future risk.

Excluding the corrupt

THE PROBLEM

Companies and individuals known to be involved with corruption all too easily slip through the global net unnoticed. A corruption conviction in one country is no deterrent or prevention to acting corruptly elsewhere. Criminal sanctions are costly and risky to apply – but administrative sanctions are not.

The threat of exclusion from public contracts is a significant deterrent for companies: a contractor may be more likely to turn away from corruption, fraud, waste and abuse at the start of a bidding process, or decline to bid entirely if that contractor cannot safely and ethically bid for and perform the contract. A debarment sanction can bar a contractor that has already engaged in corruption during a contract from the procurement process for a specified period of time. Excluding corrupt bidders from public procurement is a significant aspect of clean contracting.

WHAT HAPPENED AT THE SUMMIT?

At the Anti-Corruption Summit the UK committed to “introduce a conviction check process to prevent corrupt bidders with relevant convictions from winning public contracts, and is committed to exploring ways of sharing such information across borders”.