Procurement: PPN 04/21 – Exclusions, Conflicts of Interest and Whistleblowing

On 20 May 2021, the Cabinet Office published Procurement Policy Note, PPN 04/21 Applying Exclusions in Public Procurement, Managing Conflicts of Interest and Whistleblowing – the second of a flurry of four new PPNs that have been published in the last month.

PPN 04/21 is addressed to Central Government Departments, their Executive Agencies and Non-Departmental Public Bodies (In-scope Organisations) but is also relevant to the wider public sector such as local authorities and NHS bodies.

The guidance published under PPN 04/21 (the Guide) replaces and builds on the policy guidance that was set out in PPN 01/19 and deals with the provisions in the legislation relating to the exclusion of bidders, the management of conflicts of interest and the handling of whistleblowing around procurement processes.  It is accompanied by 17 pages of Frequently Asked Questions.

Applying Exclusions

• Mandatory exclusion: the Guide re-iterates when and to whom mandatory exclusions apply. The PPN notes that In-scope Organisations may, in limited, exceptional circumstances, proceed with an award of contract even if there are grounds for mandatory exclusion. Regulation 57(6) allows such an award where there are overriding reasons relating to the public interest. The PPN provides the example where, if urgently needed vaccines or emergency equipment can only be purchased from an economic operator to whom mandatory exclusion grounds apply, then the contracting authority can proceed.
• Discretionary exclusion: The Guide sets out what the grounds for discretionary exclusion are and examples where these may arise.
• Self-declaration: The Guide sets out when, in what circumstances and who must provide a self-declaration that exclusion grounds do not apply.
• Verification: The Guide explains when evidence of verification can be sought and what evidence can be provided. It also highlights that In-scope Organisations must request up to date evidence from the winning bidder before award of the contract. If the supplier fails to provide the required evidence within set timeframes, or the evidence demonstrates that a mandatory exclusion ground applies, the award of the contract should not proceed. If the evidence demonstrates that a discretionary exclusion ground applies, In-scope Organisations may exclude the bidder.
• Self-cleaning: The Guide sets out what a bidder must demonstrate in order to show that that self-cleaning evidence is sufficient. It is for the bidder to demonstrate it has self-cleaned, but this must be to the satisfaction of the In-scope Organisation, taking into account the gravity and particular circumstances giving rise to the ground for exclusion.

Conflicts of interest

• Definitions: The Guide provides the definition for an actual, potential and perceived conflict of interest.
• What exists today and why conflict of interest is important: The Guide provides an overview of the Code of Conduct and legal duties in relation to conflicts of interests and highlights the consequences if conflicts are not managed appropriately.
• Framework for managing conflicts: The Guide sets out what an effective framework for managing conflicts will consist of. The Guide provides that such a framework will include:
  • Guidance and training;
  • Declarations of interests;
  • Conflict identification and resolution;
  • Audit and sanctions; and
  • Supply-side requirements

The Guide then provides further detail on each of these recommended aspects and also deals with “Special situations” which includes Direct Awards, Pro-bono Work and Employment of Civil Servants

Whistleblowing

The guidance in relation to whistleblowing remains largely unchanged from PPN 01/19. It explains what whistleblowing is and refers to compliance with the Civil Service Code.

You can access PPN 04/21, the Guide for Commercial and Procurement Professionals and Frequently Asked Questions at: Procurement Policy Note 04/21: Applying Exclusions in Public Procurement, Managing Conflicts of Interest and Whistleblowing - GOV.UK (www.gov.uk)

If you would like to discuss this topic in more detail please contact Fran Mussellwhite, Partner or Victoria Croshaw, Solicitor.