Conflicts of Interest

It has always been important to ensure measures are taken to prevent conflicts of interest occurring when spending public funds. However with the introduction of The Public Contracts Regulations 2016 (the Regulations) last year, and a recent case brought before the UK Courts brought before the UK Courts involving a challenge for breaching duties relating to conflicts of interest, the importance of managing conflicts of interest has been strengthened.

The Regulations requires contracting authorities to take appropriate measures to effectively prevent, identify and remedy conflicts of interest arising in the conduct of procurement procedures so as to avoid any distortion of competition and to ensure equal treatment of economic operators. In order to fulfil these duties it is recommended that members require all bidders in a procurement process to complete a Conflicts of Interest Declaration Form and establish a process for dealing with potential conflicts. To assist, a template Conflict of Interest Declaration Form is available on FELP.

Whilst the Regulations encourage pre market engagement, they do also require contracting authorities to take appropriate measures to ensure that competition is not distorted by the participation of bidders in pre-market engagement or preparation of the procurement procedure. Practical measures that could be taken include;

• Making available to other candidates and tenderers relevant information exchanged in the context of or resulting from the involvement of the candidate or tenderer in the preparation of the procurement procedure
• The fixing of adequate time limits for the receipt of tenders.

However, contracting authorities are also required not to automatically exclude bidders for a conflict and should instead investigate a potential conflict, giving bidders an opportunity to defend themselves and demonstrate that competition hasn’t been distorted. If a conflict does exist, it is recommend that members consider all possible measures that could be taken to level the playing field.

Further guidance on managing conflicts of interest can be found on FELP.