Exclusion and Debarment Under the Procurement Act 2023 Explained

The Procurement Act 2023 has had a significant impact on social value since it came into force in February 2025.

We’ve summarised the most important effects of the Procurement Act previously, but in this blog we’re going to focus on the Exclusion and Debarment regime: that is, the new system brought in to prevent certain suppliers from bidding on some or all public contracts. 

In what follows we’ll cover:

• What Exclusion and Debarment mean 
• The grounds on which suppliers can be excluded or debarred
• What suppliers can do if they find themselves in either of these positions

What are Exclusion and Debarment all about?

Exclusion and Debarment have been introduced as means of reducing risk in public procurement. 

“Risk” in this sense can apply to any of the following five areas:

1. Reliable delivery of public contracts: the risk that a supplier will fail to deliver contractual requirements, either through a breach of contract or inadequate performance. This does not relate to the supplier’s ability to deliver a particular requirement but rather that there is a general risk of failure to perform; 
2. Effective competition for public contracts: the risk that a procurement, including the assessment of exclusions, cannot be undertaken in accordance with the legal regime and in particular the procurement objectives in section 12 of the Procurement Act 2023 (Act); 
3. Public confidence in the honesty, integrity and probity of suppliers in the delivery of public contracts: the risk that public confidence may be undermined due to a supplier not acting in good faith; 
4. Protection of public funds: the risk that a supplier may incur additional costs for the public sector (and therefore the taxpayer) during the delivery of public contracts; and 
5. Protection of the public, the environment, national security interests and the rights of employees: the risk that a supplier may be a risk to these aspects which are considered particularly important in relation to suppliers to the public sector

Point 5 has the most obvious crossover with the sphere of social value, but the increased emphasis on effective contract management and delivery on commitments put in place by PPN 002 and the new Social Value Model make Point 1 highly relevant as well. It is expected that this will continue under PPN 026.

What is Exclusion?

Contracting authorities can exclude suppliers from bidding for particular contracts. Schedules to the Procurement Act set out long lists of grounds for exclusion:

• Schedule 6 – Mandatory grounds for exclusion. Suppliers must be “excluded” if they meet any of the listed conditions, which include conviction for various criminal offences, being subject to a ruling from the Competition and Markets Authority for competition infringement, receiving a fine for tax or fraud offences, national security grounds, or failure to comply with official notices under an investigation.
• Schedule 7 – Discretionary grounds for exclusion. Suppliers are “excludable” – that is, they can be excluded – if, for example, they have been subject to bankruptcy, insolvency, or winding-up orders, if they have been or are believed to have been involved in professional misconduct or labour market infringements, if they have been found in breach of or performing poorly against previous relevant contracts, etc.

Exclusion applies not only if the supplier itself meets one of these criteria. It also applies if a “connected person” does. 

A “connected person” in this sense includes:

• Owners of significant stakes in a business
• Directors
• Parent companies, subsidiaries, and predecessor companies

What is Debarment?

The Procurement Review Unit maintains a central debarment list of suppliers who are excluded from all procurements governed by the Act. 

• Being placed on the list prevents the supplier from participating in any procurements or being awarded public contracts for up to five years
• Only government departments – and their delegated counterparts in Scotland, Wales, and Northern Ireland – can debar a supplier
• When a contracting authority excludes a supplier (for mandatory or discretionary reasons) it is obliged to report the decision to its appropriate national or delegated authority to consider debarment as well 
• As well as relying on these reports, Government departments have powers to investigate and debar suppliers proactively. When this results in a debarment, the concluded investigation must be shown to the affected supplier and then made public  

Rights of Appeal and ‘Self Cleaning’

The government guidance is very clear that exclusion or debarment is intended to be risk-based, and not a punishment for previous behaviour or a means of setting an example to deter others. 

For that reason, Section 57 of the Procurement Act makes it clear that a supplier must not only meet one of the mandatory or discretionary grounds for exclusion, but also: 

“The circumstances giving rise to the application of the exclusion ground are continuing or likely to occur again.”

So authorities are expected to take “self cleaning” activities by the supplier (and connected persons) into account when deciding to exclude. Such activities can include:

• Evidence that the supplier or person has taken the circumstances seriously, for example by paying compensation
• Steps that the supplier or person has taken to prevent the circumstances occurring again (eg changing staff or management, training, reforming procedures)
• Commitments made that such steps will be taken, or to provide information or access to allow verification or monitoring of such steps
• Time elapsed since the circumstances last occurred

In addition, suppliers have various legal rights regarding exclusion or debarment:

• Right of appeal
• Right to obtain interim relief, pending appeal (invoking an 8-day standstill period)

Hopefully, nobody reading this ever finds themselves in the position of being debarred, excluded, or excludable. But insofar as these arrangements now form an important plank of how public procurement in the UK works, it’s important to have a clear understanding of how they operate. 

We hope that this short explainer blog has gone some way to helping you achieve that!