The recent success of the Good Law Project in its case against the Cabinet Office brought the issue of conflicts of interest, and perceived conflicts of interest, in public procurement, and the use of the correct procurement processes to the fore.
In May 2021, the Government issued Procurement Policy Note 04/21 (“PPN 04/21”) that replaced existing policy guidance previously established in PPN 01/19. The purpose of PPN 04/21 is to update and clarify the changes following Brexit. One of the ways that the Government has done this is by providing a list of answers to frequently asked questions. It also provided more guidance to contracting authorities for the development and enhancement of local strategies and systems together with the processes and procedures in place in order to assist with the prevention, identification and remediation of conflicts of interest.
Exclusions in Public Procurement
The Public Contract Regulations 2015, Utilities Contracts Regulations 2016 and Concessions Contracts Regulations 2016 set out the grounds for the exclusion of bidders and these have been largely unchanged despite the UK leaving the EU. The regulations set out the grounds for mandatory and discretionary exclusions, exemptions to exclusions, duration of exclusion and self-cleaning together with the methods by which the existence of grounds for exclusion can be verified.
Conflicts of Interest
The Regulations state that a conflict exists where relevant members of staff have direct or indirect financial, economic or other personal interests, which might be perceived to compromise their impartiality and independence in the procurement process. In public procurement, there are three categories in which these may arise: actual, potential or perceived.
A conflict of interest can arise at any point during the procurement process and where they are not managed appropriately, can lead to consequences such as reputational damage, prosecution of individuals or even legal challenges for breach of the Regulations.
Whistleblowing
The guidance for whistleblowing under this PPN 04/21 and its associated documents has remained largely unchanged. However, it is important for contracting authorities to be aware of what whistleblowing is and ensure they not only have an appropriate policy in-house but their employees are aware of it.
The Government has released an extensive guidance document setting out the details for applying the different types of exclusions. We recommend that all contracting authorities take time to consider the contents of this guidance document and, where appropriate, apply it within their organisations.
The guidance released in relation to conflicts of interest, in particular the framework set out for managing conflicts, is particularly important. This provides contracting authorities with the appropriate steps to manage conflicts effectively and avoid far-reaching consequences.
Our Procurement Team provides commercial and practical advice on a range of public procurement matters. If you have any queries about the contents of this article, or public procurement law more generally, please get in touch with a member of our Team.
