Exclusion grounds: Procurement Act 2023

In shortUnder the Procurement Act 2023, a public buyer must exclude a supplier if a mandatory exclusion ground applies and the circumstances are continuing or likely to occur again, and may exclude it if a discretionary ground applies on the same test. The grounds can bite through your directors, parent company or the subcontractors you rely on, not just your own company. Before deciding, the buyer must give you a reasonable opportunity to make representations and provide evidence, so preparing your self-cleaning evidence early matters.

Excluded and excludable suppliers

Section 57 of the Procurement Act 2023 sets out two categories (legislation.gov.uk):

Excluded supplier: a mandatory exclusion ground in Schedule 6 applies to the supplier (or, where relevant, a connected person) or an associated person, and the circumstances are continuing or likely to occur again. The buyer must exclude.
Excludable supplier: a discretionary exclusion ground in Schedule 7 applies on the same basis. The buyer may exclude.

A supplier is also excluded or excludable if it, or an associated person, is on the central debarment list for a mandatory or discretionary ground (Guidance: Exclusions, GOV.UK). The guidance is clear that the regime is not meant to punish past misconduct but to protect public contracts from unacceptable risk.

Mandatory grounds (Schedule 6)

Part 1 of Schedule 6 covers convictions for specific offences, including offences committed outside the UK that would be offences here:

corporate manslaughter or corporate homicide;
terrorism offences;
theft, fraud and bribery;
labour market, slavery and human trafficking offences;
organised crime;
tax offences such as cheating the public revenue;
cartel offences;
ancillary offences such as aiding, abetting or conspiring to commit any of these.

Part 2 does not need a conviction. It covers national security threats in relation to particular types of contract, certain tax misconduct and competition law infringements, and failure to cooperate with a debarment investigation.

Discretionary grounds (Schedule 7)

The discretionary grounds mostly do not need a conviction. The government guidance groups them as:

labour market misconduct;
environmental misconduct;
insolvency and bankruptcy;
potential competition infringements;
professional misconduct;
breach of contract and poor performance;
acting improperly in a procurement;
national security.

The breach of contract and poor performance ground is the one most suppliers should watch. It covers contracts with a public authority, not only above-threshold public contracts. A breach counts as sufficiently serious where it led to termination, damages or a settlement agreement. Poor performance applies where a supplier did not perform to a satisfactory level and failed to improve after being given an opportunity, for example through a rectification or improvement plan. It also applies where a buyer has published a contract performance or termination notice about breach or poor performance under section 71.

The 5-year rule

Events more than 5 years old cannot be considered. For mandatory grounds, the test is when the conviction, decision or event occurred. For discretionary grounds, it is when the buyer was aware, or a reasonably well-informed decision-maker would have been aware, of the event. The Act extended the discretionary period to 5 years to match the mandatory grounds. There are transitional rules too: for grounds that are new, such as corporate manslaughter or labour market misconduct, events before the regime came into force cannot be considered.

It is not just your company

Exclusion grounds can apply through three groups of people and organisations:

Who	What it covers	Can you replace them?
Connected persons	People or companies with significant influence or control over you (such as majority shareholders), directors and shadow directors, parent and subsidiary companies, and predecessor companies	No. There is no right to replace a connected person before exclusion
Associated persons	Anyone you rely on to meet the conditions of participation, such as a specialist subcontractor or consortium member (guarantors are not included for exclusions)	Yes. The buyer must give you the opportunity to replace them first
Subcontractors	Every subcontractor you intend to use, at any tier. Buyers must ask for them and check each against the debarment list	Yes. The buyer must give you the opportunity to replace them first

Sister companies are not connected persons unless they fall into one of the other categories. Where the link to a connected person is weak, the guidance says a buyer may take that into account when deciding whether to exclude for a discretionary ground.

Self-cleaning: how to show it will not happen again

An exclusion ground only leads to exclusion if the circumstances are continuing or likely to occur again. Section 58 lets buyers consider:

evidence you took the circumstances seriously, for example by paying compensation;
steps you have taken to prevent a repeat, such as changing staff or management, or putting procedures and training in place;
commitments to take those steps, or to give the buyer information or access to monitor them;
the time since the circumstances last occurred;
any other evidence, explanation or factor the buyer considers appropriate.

Before deciding that you are excluded or excludable, the buyer must give you a reasonable opportunity to make representations and provide evidence. It may only demand particular evidence where that is proportionate. The guidance says buyers should look at underlying issues, such as weak governance or no compliance function, not only the specific incident, and that time on its own is not enough.

Where exclusions are checked

Your supplier information. Information about you and your connected persons, including exclusion grounds, must be on the Central Digital Platform and shared with the buyer before the end of the tendering period.
The PSQ. Part 1 of the Procurement Specific Questionnaire confirms that information, and Part 2 asks for associated persons and intended subcontractors so the buyer can check them too.
The debarment list. Buyers must check the debarment list in every covered procurement, for you, your associated persons and your intended subcontractors.
After award. The Act implies a right to terminate if you, or a checked subcontractor, become excluded or excludable during the contract (section 78).

If a buyer excludes a supplier, it must notify the appropriate authority within 30 days, which can lead to a debarment investigation.

Prepare before you bid

List your connected persons. Check that directors, shareholders with significant control and parent companies are correct on the Central Digital Platform.
Ask your key subcontractors. Confirm in writing that no exclusion grounds apply to them before you name them in a bid.
Review the last 5 years. Look for terminations, damages claims, settlements, performance notices and regulatory decisions across your company and connected persons.
Write the self-cleaning file now. If something did go wrong, record what happened, what you paid or put right, what you changed and who signs it off. Keep the evidence ready to send at short notice.
Answer honestly. Misleading information is itself a risk: acting improperly in a procurement is a discretionary ground.

For the full picture of the selection stage, read our main guide: Procurement Specific Questionnaire (PSQ) explained.

How West Gate can help

Find the work: search open UK contracts free with our tender search, or set up free tender alerts for your sectors and regions.
Outsource the selection stage: our PSQ, SQ and PQQ support covers your Central Digital Platform information, exclusions and connected persons, and the evidence for conditions of participation. For the full bid, our bid writers handle research, compliance, writing and deadlines. West Gate has a 90%+ win rate† and does not support competing bidders on the same opportunity.
Talk it through: book a free 30-minute call if you are unsure how to answer an exclusions question or present self-cleaning evidence.

† Figures based on bids West Gate submitted and contracts awarded in 2025.

Frequently asked questions

What is the difference between an excluded and an excludable supplier?

An excluded supplier has a mandatory exclusion ground (Schedule 6) that is continuing or likely to recur, and the buyer must exclude it. An excludable supplier has a discretionary ground (Schedule 7) on the same test, and the buyer may exclude it.

How far back can a buyer look?

Five years. Events more than 5 years old cannot be considered for either mandatory or discretionary grounds, and transitional rules limit older events for grounds that are new or previously had a 3-year limit.

Can I be excluded because of a subcontractor?

Yes, if an exclusion ground applies to an associated person or an intended subcontractor. But the buyer must first give you the opportunity to replace them.

Does a past problem mean automatic exclusion?

No. Exclusion only follows if the circumstances are continuing or likely to occur again. The buyer must let you make representations and provide evidence, such as compensation paid, management changes and new procedures.

Can poor performance on a past public contract lead to exclusion?

It can. It is a discretionary ground where a supplier failed to perform to a satisfactory level and did not improve after being given the opportunity, or where a breach was serious enough to lead to termination, damages or a settlement.

Sources

General information, not legal advice. Always follow the tender documents and take legal advice where needed.

Exclusion grounds under the Procurement Act 2023: a supplier's guide