Blacklisting Needs Kid Gloves

Blacklisting Needs Kid Gloves

June 28, 2022
Procurement

In the UK’s House of Lords debate on procurement reform, there was some forthright questioning within the government on whether Bain and Company, who had been found to have acted illegally in South Africa, should still be engaged by the UK Government. The exchange raises the question of how the blacklisting of suppliers is intended to work.

Should a local company that was found to have acted illegally in a foreign country automatically be blacklisted? What if the offending company was a local subsidiary of a global company, as is the case with Bain and Company? Why should an independent organisation be tarred with the actions of a team that they have the misfortune to share a brand with? Or should we assume that a company that fails to prevent this sort of crime should not be trusted regardless of location?

What if the country in question does not have an independent judiciary? Or if the company maintains that any findings against them are spurious? These problems may be enough to decide to keep all blacklisting local, but if a company was proudly supporting the Russian government against the interests of our ally Ukraine, then buyers would want the power to be able to exclude them from tenders.

Then there’s the question of scale, what if a highly valued supplier with multiple, high-value, national contracts is found to have broken the law in a contract with a small local council? Can the government turn a blind eye to their malfeasance, but would a blanket ban be a reasonable response? What if a supplier has held perfectly legitimate meetings with senior staff and Ministers in a department? Does excusing them from debarment create problems concerning favouritism?

Governments that want to blacklist suppliers need to be ready to answer all of these questions and more. It won’t be hard for lawyers to draft up the reasons for blacklisting a supplier, it will be down to Ministers to decide when to use that power, and above all to justify the decisions they make.

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