The bidder must be given the opportunity to provide evidence that they have taken sufficient and appropriate remedial action i.e. they have ‘self-cleansed’. If you are satisfied that the evidence they have given is sufficient to demonstrate reliability, you should not exclude the bidder from the procurement procedure on those grounds.

The bidder must satisfy that it has: 

• paid, or undertaken to pay, compensation for any damage caused by the criminal offence or misconduct;
• provided detailed facts and circumstances by collaborating with the investigating authorities; and
• taken appropriate concrete technical, organisational and personnel measures to prevent further criminal offences or misconduct.

In the case of tax and social security breaches, the bidder should not be excluded if they have fulfilled their obligations by paying or have entered into a binding agreement with the view to paying monies, due or the obligation to repay otherwise ceases. 

When considering any self-cleansing measures, organisations must consider all relevant factors.  This includes the gravity and particular circumstances of the criminal offence or misconduct.

If you believe the bidder’s remedial action is insufficient to demonstrate reliability, you must provide them with a statement outlining the reasons for the decision. This must be provided in writing as soon as is reasonably practical to allow the bidder to understand why the self-cleansing measures they have taken are insufficient.

Questions relating to exclusion grounds are contained in the SPD.  You must use the SPD for all Route 3 procurements.  More information on the SPD and the Standardised Statements is contained in the SPD station.

A document containing a set of "standardised statements" has been developed to support you in explaining the exclusion criteria to bidders.  Within the standardised statement document, is information that can be added to your contract notice in section II.2.14 (Additional Information) The Standardised Statements document can be found at the bottom of the page. 

Please note that if you use the online SPD module on PCS, there is no need to add information on the Exclusion Grounds to the Contract Notice as they are automatically added to the module.

Buyers must ask if a bidder has been convicted by final judgement of one of the criminal offences contained in the relevant regulations.

This includes:

• Participation in a criminal organisation
• Corruption
• Bribery and certain types of fraud
• Terrorist offences or offences linked to terrorist activities
• Money laundering or terrorist financing
• Child labour and other forms of trafficking in human beings

Buyers must ask if a bidder has taken part in blacklisting activities. 

Blacklisting is the practice of systematically denying individuals employment  who would otherwise be able to be employed.  

Blacklisting is done on the basis of information, accurate or not, held in some type of database. The Scottish Government regards blacklisting or the compiling of a blacklist as totally unacceptable.

The Employment Relations Act 1999 (Blacklists) Regulations 2010 provide rights for individuals if blacklisting results in refusal of employment, detriment, dismissal or redundancy. 

The Scottish Government treats tax and social security obligations seriously.

Organisations must exclude bidders where they have been subject to a binding decision (judicial or administrative) which found a breach of legal obligations to pay tax or social security contributions.  A judicial decision is one which is made by a court or tribunal. An administrative decision is one which is made by the relevant tax authority in the UK or in the country where the bidder is established.

Organisations may exclude a bidder where the bidder has breached its tax or social security obligations and the decision has been reached by means other than a binding decision (judicial or administrative).

Buyers can request the following examples of evidence to understand a bidder’s breach in tax or social security obligations:

• credit references, i.e. details of any outstanding tax debt
• company accounts, depending on the size of the tax debt the bidder may be obliged to include this in their accounts
• an admission by a bidder to an Occasion of Non-Compliance (OONC)
• an admission by a bidder of the failure of an avoidance scheme which they were involved in and was, or should have been, notified under Disclosure of Tax Avoidance Scheme (DOTAS)

In the case of tax and social security breaches, the bidder should not be excluded if they have fulfilled their obligations by paying or have entered into a binding agreement with the view to paying the money due or the obligation to repay otherwise ceases. 

Note – these examples relate to the UK tax regime, and there will be equivalents in other countries, which should be considered when relevant. 

One of several discretionary grounds for exclusion relates to social, environmental and employment law obligations. These obligations include any relevant legislation, as well as relevant collective agreements and specific international agreements.

As these laws are wide ranging, you can focus on a specific area of law that bidders must take into account when making their self-declaration in respect of exclusion grounds. For example, breaches of employment and equality legislation. 

Bidders may be excluded where your organisation can demonstrate that the bidder has breached any of these obligations. This exclusion ground is discretionary and it is therefore for your organisation to decide if exclusion is appropriate.

When determining whether to exclude a bidder on this basis, you should be proportionate in your decision, taking into account the size of the contracts, the relevance of the breach, and its impact on the operational and reputational risk to the delivery of the contract and reputational risk to the organisation. 

Further information can be found in the Public Contact (Scotland) Regulations 2015 57 (2). 

Where a bidder is bankrupt or subject to insolvency proceedings, you can choose whether to exclude them from the procurement exercise.

Potential evidence you could request to evaluate the situation include:

• copies of accounts verifying they have sufficient liquidity to perform the contract
• the bidder's business plan outlining steps they will take to address concerns, or
• references from other recent customers.

When considering whether to exclude such a bidder you should consider contract delivery potential risks, such as:

• the impact this may have on the sub-contracting supply chain;
• the scale of the contract;
•  the potential consequences of the contract failing.

Additionally, you should take into account the potential benefits of awarding a contract to such a bidder. These can include:

• providing opportunities to contribute to increased employment in communities;
• the wellbeing of local and regional communities ;
• helping unlock the innovation or economic potential with local businesses.

Bidders may be excluded if they are guilty of grave professional misconduct, which renders its integrity questionable.

Further information can be found in The Public Contracts (Scotland) Regulations 2015, 58 (8) (c)

When determining whether to exclude a bidder on this basis, your organisation should be proportionate in its decision, taking into account the size of the contract, the relevance of the breach, and its impact on the operational and reputational risk to the delivery of the contract and reputational risk to the organisation. 

Bidders may be excluded if a conflict of interest exists that cannot be effectively remedied by other less intrusive measures, and that may impact the procurement process. 

Further information can be found in The Public Contracts (Scotland) Regulations 2015, 58 (8) (e)

When determining whether to exclude a bidder on this basis, your organisation should be proportionate in its decision, taking into account the size of the contract, the relevance of the breach, and its impact on the operational and reputational risk to the delivery of the contract and reputational risk to the organisation. 

Bidders may be excluded if a distortion of competition arises from

• the bidder entering into agreements with other bidders to distort competition
• the prior involvement of the bidder in the preparation of the tender which cannot be remedied by other, less intrusive measures. 

Further information can be found in The Public Contracts (Scotland) Regulations 2015, 58 (8) (d) (f)

When determining whether to exclude a bidder on this basis, your organisation should be proportionate in its decision, taking into account the size of the contract, the relevance of the breach, and its impact on the operational and reputational risk to the delivery of the contract and reputational risk to the organisation.

Bidders may be excluded if they are found to have:

• seriously misrepresented the supply of information (when this information would be used to confirm there are no grounds for their exclusion from the procurement exercise, and therefore the bidder meets the selection criteria) or withheld information;

the bidder has:

• unduly influenced the decision making process
• obtained confidential information which may give them undue advantages in the procurement procedure
• negligently provided misleading information that may have a material influence on decisions

Further information can be found in The Public Contracts (Scotland) Regulations 2015, 58 (8)(h)(i)

Bidders may be excluded if they have shown significant or persistent deficiencies in the performance of a substantive requirement under a prior public contractor or a prior concession contract which led to early termination of that prior contract, damages or other comparable sanctions.

Further information can be found in section 9 of The Public Contracts (Scotland) Regulations 2015 58(8)(g)

When determining whether to exclude a bidder on this basis your organisation should be proportionate in its decision, taking into account the size of the contract, the relevance of the breach, and its impact on the operational and reputational risk to the delivery of the contract and reputational risk to the organisation. 

Organisations must consider how, in conducting a procurement, they can facilitate the involvement of small and medium enterprises, third sector bodies and supported businesses in that process. This can include the use of sub-contractors to support the delivery of the contract.

Organisations can, at their discretion, require verification of whether there are any grounds for the exclusion of any sub-contractor involved in the delivery. Where this information is sought the SPD must be used.

Where this verification shows that there are mandatory grounds for the exclusion of a sub-contractor, the organisation must require that they are replaced. 

You should keep in mind that this only applies to sub-contractors upon who the main bidder is not relying on to meet the selection criteria of the contract.

Where there are discretionary grounds for the exclusion of a sub-contractor, the organisation can choose whether it should be substituted. Organisations must decide whether to apply discretionary exclusion grounds to sub-contractors involved in the contract delivery on a case by case basis, taking into account the various circumstances of the contract.

Exclusion grounds apply to a person who is:

• a member of the administrative, management or supervisory body of the bidder or
• has powers of representation, decision or control regarding such bidder

In the Standardised Statement document, along with the selection statements, you can find two exclusion ground statements:

• one for the Contract Notice for below threshold procurements and
• one for the above threshold Contract Notice.

In the case of a Route 3 procurement, please make sure that you copy over the statement for an above threshold Contract Notice exclusion statement to the textbox in the Contract Notice under II.2.14 Additional Information. This will make sure that you have informed the bidders that you will apply mandatory and discretionary exclusion grounds in the procurement exercise.

Please note that if you are using the online SPD module in PCS, there is no need to include this in the contract notice.

The mandatory exclusion grounds (regulation 58(1) and (3) of the Public Contracts (Scotland) Regulations 2015) must be applied to all procurements, and you can also choose to apply the discretionary exclusion grounds.

Exclusion statements should be put under II.2.14 Additional Information of the Social and other Specific Services Contract Notice or detailed in the online SPD Module on PCS if it is being used.