The mandatory exclusions for corruption in the new EC Procurement Directives

Abstract:

The EC's new Public Procurement Directives include new provisions requiring contracting authorities to exclude from contracts firms convicted of corruption, in support of the EU's anti-corruption policy. This article provides a critical assessment of these provisions. It is suggested that there are a number of problems with the provisions. First, is not clear how effective they are likely to be in addressing corruption. Secondly, their application can lead to significant costs and delays in procurement--for example, because of difficulties in establishing whether persons associated with the firm (such as subsidiaries or directors) have any relevant criminal convictions. These concerns have led to the final version of the provisions being considerably watered down from that originally proposed by the Commission. Thirdly, it is questionable whether it is appropriate to use procurement to impose such sanctions and whether sufficient procedural safeguards are provided for affected firms. In view of the practical difficulties of operating such provisions, Member States implementing them may have to choose between making the provisions effective, with attendant procedural and financial burdens, or leaving the measures as largely symbolic.