Don’t expect swift justice with public sector contract bans

29 November 2012
The concept of barring companies found to have acted contrary to the law or in a negligent manner from public sector contracts has received a lot of attention over recent months. There is a strong appetite in the UK to keep those who have done wrong, been perceived not to have paid enough tax or failed to fulfil contractual requirements, away from public deals.

Measures discussed here, may well be coming down the pipeline, but even when they come, satisfaction will not be delivered quickly.

Yesterday, the US government announced it was banning BP from federal contracts over its conduct preceding the Deepwater Horizon disaster. The oil spill, which killed 11 people and caused unprecedented environmental damage, happened more than two years ago. And while the CEO fell on his sword, share prices slumped and legal action was taken, the contracting axe has only just dropped.

This time lapse has led to the impact of the suspension being dampened down significantly. Firstly, it has given BP the time to get its house in order (which is of course no bad thing) and ready the changes required for the suspension to be lifted – in a statement the oil company suggested an agreement with the Environmental Protection Agency (EPA) is to be announced in the near future. Secondly, and most significantly, in the intervening period between the spill and yesterday’s action, the company has picked up more than 50 new deals in the Gulf of Mexico, which will be unaffected by the suspension. This is not to say the punishment should have been tougher or that the EPA should have moved more quickly. The case is so complex that of course, due care and attention should be apportioned. But such is the process and complexity, that by the time any ban is able to come into force, those baying for some form of redress are unlikely to be satisfied.
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