Fighting Corruption in Public Procurement: A Comparative Analysis of Disqualification or Debarment Measures

Preface vii
Table of Cases xv
Table of Legislation xvii
Table of Conventions, Treaties, etc xlv
1: Introduction 1
2:  Corruption, Anti-Corruption Measures and Disqualification 7
2.1 Introduction 7
2.2 The Meaning, Nature and Effects of Corruption 7
2.2.1 Economic Theories on Corruption 9
2.2.2 Political Theories on Corruption 10
2.2.3 Social Theories on Corruption 11
2.3 Anti-Corruption Measures 13
2.3.1 Domestic Measures against Corruption 14
2.3.2 International Measures against Corruption 16
2.4 Public Procurement And Corruption 24
2.4.1 The Incidence of Corruption in Public Procurement 24
2.4.2  The Common Types of Corrupt Activity in Public
Procurement 25
2.4.3  Measures Used in Procurement Regulation to Fight
Corruption 27
2.5 The Use of Disqualifications in Public Procurement 31
3: An Overview of Procurement Regulation, Anti-Corruption
and Disqualification Policy in the Jurisdictions 38
3.1 Introduction 38
3.2 The European Union 38
3.2.1 Public Procurement Regulation in the EU 38
3.2.2 The EU’s Policy Against Corruption 41
3.2.3 Disqualification in the EU 43
3.3 The United Kingdom 47
3.3.1 Public Procurement Regulation in the UK 47
3.3.2 The UK’s Policy Against Corruption 51
3.3.3 Disqualification in the UK 53
3.4 The United States 56
3.4.1 Public Procurement Regulation in the United States 56
3.4.2 The United States’ Policy Against Corruption 58
3.4.3 Disqualification in the United States 60
3.5 The World Bank 64
3.5.1 Procurement Regulation in the World Bank 64
3.5.2 The World Bank’s Anti-Corruption Policy 66
3.5.3 Disqualification in the World Bank 69
3.6 South Africa 71
3.6.1 Public Procurement Regulation in South Africa 71
3.6.2 South Africa’s Anti-corruption Policy 74
3.6.3 Disqualification in South Africa 76
4: The Offences and the Requirement for a Conviction for
Disqualification 82
4.1 Introduction 82
4.2 The European Union 82
4.2.1 Offences for Disqualification 82
4.2.2 Disqualifying on the Basis of Convictions 84
4.2.3 The Status of Foreign Convictions 86
4.3. The United Kingdom 88
4.3.1 Offences for Disqualification 88
4.3.2 Disqualifying on the Basis of Convictions 90
4.3.3 The Status of Foreign Convictions 91
4.4 The United States 93
4.4.1 Offences for Disqualification 93
4.4.2 Disqualifying on the Basis of a Conviction 94
4.4.3 The Status of Foreign Convictions 95
4.5 The World Bank 96
4.5.1 Offences for Disqualification 96
4.5.2 Disqualifying on the Basis of Convictions 96
4.5.3 The Status of Foreign Convictions 97
4.6 South Africa 98
4.6.1 Offences for Disqualification 98
4.6.2 Disqualifying on the Basis of Convictions 101
4.6.3 The Status of Foreign Convictions 102
4.7 Summary and Analysis of Main Issues 102
4.7.1 Requirement for Convictions 102
4.7.2 The Issue of Foreign Convictions 104
5:  Procedural Issues Affecting Disqualification 106
5.1 Introduction 106
5.2 Procedure for Disqualifying 107
5.2.1 The Stages of the Disqualification Process and
Accompanying Procedural Requirements 107
5.2.2 Are Disqualification Procedures Fair and
Transparent? 125
5.3 Time Limits for Disqualification 130
5.3.1 Time Limits in the EU and UK 130
5.3.2 Time Limits in the US 134
5.3.3 Time Limits in the World Bank 134
5.3.4 Time Limits in South Africa 135
5.3.5 Time Limits, Proportionality, Reasonableness,
Fairness and Transparency 136
5.4 Summary and Analysis of Main Issues 137
5.4.1 The Existence of a Clear Procedure for
Disqualification 137
5.4.2 Time Limits 138
6:  Disqualifying Entities and the Scope of Disqualification 140
6.1 Introduction 140
6.2 Disqualifying Entities 141
6.2.1 Courts 141
6.2.2 Procuring Authorities 143
6.2.3 Administrative Bodies 146
6.2.4 The Legislature 148
6.3 The Scope of Disqualification 149
6.3.1 A Requirement that Disqualification be Extended
and Discovering Previous Disqualifications 150
6.3.2 No Clear Requirement that Disqualification be
Extended 152
6.3.3 The Elements of the Disqualification Decision Left
to the Non-Disqualifying Entity 154
6.4 Summary and Analysis of Main Issues 155
7: Investigations 157
7.1 Introduction 157
7.2 The Existence of a Requirement or Obligation to Investigate 158
7.2.1 The Requirement to Investigate for Disqualification
Measures Based on a Conviction 158
7.2.2 The Requirement to Investigate for Disqualification
Measures Not Based on a Conviction 161
7.3 The Entity with the Power to Investigate and the Extent
of the Entity’s Powers 162
7.4 The Nature and Sources of Information and Evidence 164
7.5 Summary and Analysis of Main Issues 166
8:  The Disqualification of Persons Related to a Corrupt Supplier 168
8.1 Introduction 168
8.2 Rationales for Disqualifying Related Persons 169
8.3 The Related Persons 170
8.3.1 Natural Persons 171
8.3.2 Connected Companies 186
8.3.3 Cooperating Companies 196
8.4 Summary and Analysis of Main Issues 204
8.4.1 Discovering the Existence and Complicity of Related
Natural and Legal Persons: The Expense and
Difficulty of Investigations 205
8.4.2. Procedural Burden and Delays to the Procurement
Process 206
8.4.3 The Absence of Procedural Safeguards 206
8.4.4 The Lack of Clarity in the Legislation 207
9:  The Effect of Disqualification on Existing Contracts 208
9.1 Introduction 208
9.2 Rationales for Contractual Termination 210
9.3 Is There a Duty to Terminate Existing Contracts for
Disqualification? 210
9.4 Problems with Contractual Termination 225
9.4.1 Determining if Termination is Prospective or
Retrospective 225
9.4.2 Restitution and Apportionment of Losses 227
9.4.3 Disproportionality and the Rule against Double
Jeopardy 235
9.4.4 Waste and Inefficiency 238
9.4.5 The Effect of Termination on the Delivery of Public
Services 240
9.4.6 The Effect of Termination on Third Parties 241
9.5 Summary and Analysis of Main Issues 244
9.5.1 The Existence of a Duty to Terminate 244
9.5.2 The Nature and Consequences of Termination 245
10:  Derogating from Disqualification 248
10.1 Introduction 248
10.2 Reasons for Derogating from Disqualification 249
10.2.1 Exceptional Situations 249
10.2.2 Rehabilitation Measures 260
10.3 Preventing Abuse in the Use of Derogations 270
10.4 Summary and Analysis of Main Issues 273
11: Remedies for Affected Suppliers 274
11.1 Introduction 274
11.2 The Availabilty of a Right of Review 275
11.2.1 The EU 276
11.2.2 The UK 277
11.2.3 The US 279
11.2.4 The World Bank 281
11.2.5 South Africa 285
11.3 The Kinds of Remedies Available 287
11.4 Summary and Analysis of Main Issues 295
11.4.1 Balancing the Tension between Effective Remedies
and Delays to the Procurement Process 296
11.4.2 The Availability of a Right of Review 297
Index 299