A Bribery Act policy will be necessary when tendering for public sector contracts.

Article 45 of the EU Public Procurement Directive 2004, enacted in the UK through regulation 23 of the Public Contracts Regulations 2006, provides the basis for debarring, or mandatorily excluding, companies convicted of corruption, fraud, money laundering and participation in criminal organisations from public contracts.  As regards those companies involved in the pharmaceutical or defence industries, to name but two, such debarment or exclusion could mean the death of the company.

In light of this Directive, it is likely that a company convicted under section 7 of the UK Bribery Act 2010 (failure to prevent bribery), will be debarred from tendering for future public contracts.  The reason for this is straightforward: if section 7 does not lead to automatic debarment under article 45 then, in practice, companies convicted in the UK will be beyond the Directive’s reach and the major deterrent value of it will be lost.   

To those who suggest that this is going too far, they should keep in mind that there is a defence available to companies where they are able to show that they had in place adequate procedures designed to prevent persons associated with them from undertaking conduct prohibited by the Bribery Act.  This introduces a form of proportionality in that only companies that have clearly failed to introduce adequate procedures, where there is major wrongdoing and systemic failure, are likely to be prosecuted.

The next logical step is for public bodies to require companies to already have in place adequate procedures (in other words, a Bribery Act policy) before they are even allowed to tender for public sector contracts.  If no such procedures are in place, it will become the norm to ask: why not, what has that company got to hide?  Also, given the issues previously raised by my colleague, Adam Greaves, regarding the liability of “associated parties“, such public bodies, and those working for them, will want to protect themselves from any potential exposure to those involved with bribery and corruption.