Businesses that have undertaken “unethical practices” or have a track record of “poor delivery” will be excluded from bidding for public sector procurement contracts, it has been announced.
The new rules form part of wide-ranging plans designed to make it easier for small and medium-sized enterprises (SMEs) to bid for and win civil contracts.
According to the latest statistics, small businesses accounted for just a third of all public sector contracts won in the UK in 2021.
Under the new regime, public sector procurement contracts will only be offered to businesses that can evidence ethical practices and a track record in delivery.
It means procurers will be given powers to exclude previously poorly performing suppliers – such as those that have not delivered projects on budget or on time.
Suppliers may also be banned if they have undertaken unethical practices – such as a lax approach to safety – in the past, or where there are national security or environmental concerns.
As part of the reforms, contracts may also be awarded to businesses that can provide “social value”.
And to simplify the process for small businesses with fewer resources, a single, centralised public sector procurement platform will be created.
The move comes after leaving the single market earlier this year, allowing the UK Government to scrap “hundreds of complicated and bureaucratic” EU rules.
Commenting on the changes, Chancellor of the Duchy of Lancaster Steve Barclay said: “Leaving the EU gives us the perfect chance to make our own rules for how the government’s purchasing power can be used to promote strong values.
“While doing so we’re increasing transparency and ensuring that procurement remains fair and open.
“These simpler and more flexible rules will also make it easier for small businesses to win work – placing levelling up at its heart.”
Lord Frost, Minister of State at the Cabinet Office, added: “These reforms are just one of the many areas where we are taking advantage of our exit from the EU’s rules to design a procurement system that is better tailored to the UK and our economic needs.
“They will open up new opportunities for our small businesses to win public contracts, boost efficiency and competition, and deliver better results for UK taxpayers.”
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