A conviction that will cost business

27 January 2011
There’s much uncertainty about how the Bribery Act, which comes into force this April, will impact on public procurement and particularly how the mandatory exclusion from tenders for bidders convicted of bribery will apply in practice. Under the Act there’s a strict liability corporate offence of “failing to prevent bribery” and it seems likely this will count as a bribery offence for the purpose of the mandatory exclusion under EU procurement rules. Since there is no concept of corporate offences being “spent”, an organisation’s conviction under the Act could result in a bidder’s permanent exclusion from any future public procurement processes. It’s understood the Efficiency and Reform Group at the Cabinet Office is alive to the issue and that we can expect an amendment to the procurement regulations and further clarifying guidance on the point (the Scottish Government’s consultation on how to deal with this runs until the end of January). There are also ongoing discussions with the European Commission on whether the impact of a bribery conviction can be time-limited and/or if effective “self-cleaning” - where the bidder has taken steps to remedy the offensive conduct and prevent its reoccurrence - could result in the exclusion being lifted. This approach is already recognised as a route to lifting the mandatory exclusion in some EU member states and it’s to be hoped a similar line could be taken here. If not, potential suppliers with bribery convictions could see themselves locked out of the public sector market place for the long-term. ☛ Ruth Smith is a partner in the EU and competition group at Pinsent Masons
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