Navigating competition exclusions in the Procurement Act 2023

The Procurement Act 2023, effective from 24 February 2025, brings significant changes to public sector procurement, aiming to enhance efficiency, transparency, and fairness.

In this article, written in collaboration with the Competition and Markets Authority (CMA), we explore why the Procurement Act 2023 exists, who it is designed to protect, and what businesses need to do to stay compliant with the new exclusion and debarment regime.

What is the Procurement Act?

Deterring and weeding out harmful anti-competitive activity is key to helping ensure a level playing field, so fair dealing businesses can innovate, compete on fair terms to win public sector contracts, and grow. 

Under the Act there is now a new mandatory exclusion ground for businesses involved in cartel activity and the introduction of a central debarment register.   

The new regime means that businesses who take part in illegal cartel activity such as bid-rigging, price fixing, or market sharing risk being excluded from public procurement work for up to five years. 

There is now an even greater incentive for businesses to be the first to report wrongdoing to the CMA, as those first to report under the CMA’s leniency policy can avoid exclusion and debarment.

If you are a business tendering for public sector contracts this new regime is relevant to you – here is what you need to know:

What do 'exclusion' and 'debarment' mean in the Procurement Act?

There are two key terms in the Procurement Act that businesses need to understand which will prevent them from taking part in any public sector procurement process:

• exclusion: this is where a supplier is not permitted to participate in a procurement, or be awarded a public contract, following an assessment of exclusion grounds by a contracting authority
• debarment: occurs when a supplier is placed on a central debarment list by a Minister of the Crown which prevents the supplier from participating in any procurements or being awarded public contracts for up to five years.

Why exclusion and debarment matter to businesses

Businesses that take part in illegal cartel activity such as bid-rigging, price fixing, or market sharing risk being excluded from public procurement unless they can demonstrate that they have ‘self-cleaned’ so that the wrongdoing that led to the exclusion won’t happen again.

More information on competition exclusion grounds and self-cleaning can be found on the CMA's overview page.

Businesses can be excluded if an exclusion ground applies to a ‘connected’ or ‘associated’ person. 

This includes directors, parent or subsidiary companies, and key sub-contractors.

High risk of detection

The CMA has advanced data science capabilities to help spot suspicious bidding patterns in public sector procurement, as well as robust investigative powers at their disposal. 

As a result, the risk of getting caught breaking the law is high.  

The consequences for breaking the law are serious and include: 

• big fines
• director disqualification (up to 15 years)
• prison (up to 5 years). 

Now, under the new regime, there is the additional risk of exclusion and debarment from public sector frameworks.

Steps business can take to avoid exclusion or debarment

The best way to avoid exclusion or debarment on competition grounds, is to understand and remain compliant with the law. 

The CMA has lots of business-friendly compliance guidance on its Cheating or Competing campaign page that you can share throughout your organisation.  

If, as a business, you think you may have broken competition law, there are steps you can take to avoid exclusion – provided you act quickly:

Admit wrongdoing and apply for leniency

If a supplier realises it has infringed competition law, the first step should be to admit wrongdoing and apply for leniency. 

The first supplier to report cartel activity to the CMA and be granted a 100% discount on fines will not be excluded or appear on the debarment list. 

‘Self-Cleaning’

Businesses can avoid exclusion if they can demonstrate that the circumstances leading to the exclusion ground are not continuing or are unlikely to occur again. 

This might include, for example, showing they have been granted leniency, or admitted wrongdoing and agreed to pay a penalty under the CMA’s settlement procedure. 

How to report concerns to the CMA

If you witness or suspect another business breaking the law you can:

• call 020 3738 6888
• email [email protected].

If you’ve been involved in activity that may breach competition law, you should:

• come forward and you may get leniency
• call 020 3738 6833 and the CMA can provide confidential guidance
• always seek independent legal advice.

Resources for businesses

Businesses interested in learning more about both the Procurement Act and how to stay compliant can access:

• further technical information on competition exclusions is set out in the CMA’s overview of how the Procurement Act affects contracting authorities and public sector suppliers
• further information on the exclusion and debarment regime is set out in Cabinet Office Guidance: Exclusions and Cabinet Office Guidance: Debarment
• guidance on the Procurement Review Unit which has responsibility for oversight of the Act and includes the Debarment Review Service.