The Procurement Act silly season appears to have started

The Procurement Act came into force a couple of days ago, and it is already being marshalled to deliver on something it probably should not. As horrible as the Greenfell Tower fire was, I don't see how the Procurement Act debarment process can be applied in the terms the government would like to:

"136. In addition, procurement legislation has been reformed to enable government to take stronger and broader action in relation to supplier misconduct which we will, where appropriate, utilise to effectively hold organisations to account. The new Act allows us to investigate suppliers and, if certain grounds are met, to add their names to a published and centrally managed debarment list, which must be taken into account by contracting authorities across the public sector in awarding new contracts and undertaking new procurements.

137. The Cabinet Office is launching investigations into a number of organisations criticised by the Inquiry, using new debarment powers in the Procurement Act 2023, to establish whether professional misconduct has taken place. We will make decisions on these organisations at pace."

(Grenfell Tower Inquiry Phase 2 Report: Government response)

The first problem is one of timing: the facts that may justify a debarment were carried out before the penalty (ie debarment) existed. Even if the exclusions grounds are the same, under the outgoing regime they would have to be checked by the contracting authority (not a minister) and it was possible for the economic operator to self-clean. Under the Procurement Act 2023 the debarment penalty, which now includes a list for publicity, associated process including remedies and application for removal, are completely new. Naming and shaming is a new punishment in and of itself.

The second potential problem is the exclusion grounds themselves, since there is not a perfect overlap between section 57 of the Public Contracts Regulations 2015 and Schedule 6 of the Procurement Act 2023. For example, offences under section 1 of the Corporate Manslaughter and Corporate Homicide Act 2007 are now explicitly listed on Schedule 6 but they were not in the Public Contracts Regulations 2015. I would guess this would be logical grounds to use for debarment in this instance.

Having said that, the reference to professional misconduct seems to imply that the government will go after the discretionary exclusion (Schedule 7 and not 6). This one already existed under the Public Contracts Regulations 2015 so this issue might not be applicable in this particular instance. However, Schedule 7 requires professional misconduct to be established by a court, regulator or 'other authority'. Is the Cabinet Office considering itself here an authority for these purposes? It would be a bit circular if the authority doing the debarment was also the authority for establishing professional misconduct as the grounds for a supplier to be excludable and thus debarred.

As far as I can tell, whatever contracts might have been in place were between KCTMO as the tenant management company and those contractors, so I don't see an immediate connection to public procurement in that tragedy. It seems the government will want to use the debarment list to go after behaviours happening outside procurement, which fair enough, is within the scope of the rules. I think, however, this is a sign of an interest in using procurement as a compliance tool - once more - with something that has nothing to do with public procurement.

I also think that at least for excludable suppliers included in the debarment list, while the grounds for exclusion are technically discretionary, in reality contracting authorities would be hard pressed to exercise their discretion and overrule the inclusion (note the threatening which must be taken into account by contracting authorities used). In other words, the discretionary exclusions are likely to become quasi-mandatory for suppliers included in the list...again a far cry from what happened previously and another reason to be careful with extending the new debarment regime to prior behaviours.

Going forward, if the government is willing to lean in on hard in the debarment list we should expect a lot of litigation, but at least this time around it will be the government on the receiving end of it and not contracting authorities doing its bidding.