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19 August 2014

EU Public Procurement Directive broadens grounds for exclusion of suppliers

Publication of the new EU Public Procurement Directives in February 2014 brought with them a number of changes and greater flexibility in how public procurements can be carried out. One of the main areas of change is that of exclusion criteria, which oblige or allow public authorities to prevent an operator from taking part in a public procurement process.

These criteria are dealt with in Article 57 of the Public Sector Directive (2014/24/EC) and see significant additions both to mandatory and discretionary grounds for exclusion of suppliers. New offences have been added to the existing mandatory grounds for exclusion, which include participation in a criminal organisation, corruption, fraud and money laundering. The expanded list now includes terrorist offences or offences linked to terrorist activities, terrorist financing and child labour or other forms of human trafficking offences.

Discretionary grounds for exclusion have been significantly broadened, giving public procurers greater freedom to exclude suppliers on the grounds of violation of environmental, social or labour law, grave professional misconduct, conflict of interest, collusion or poor prior performance of a public contract. Grounds for exclusion are, however, tempered by two key principles: proportionality, which requires that decisions be proportionate to the authority's aims; and ‘self-cleaning’, which means that an operator cannot be excluded if it can prove that it is working to remedy its previous wrong.

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