Suspension and Debarment in the U.S. Government: Comparative Lessons for the EU’s Next Steps in Procurement

Abstract

Governments may exclude vendors from procurement awards for many reasons, including poor performance and corruption. Excluding a vendor, whether from a particular procurement (deciding that the vendor is not qualified for award) or from an entire procurement system (suspending or debarring the vendor), calls for a complex assessment of the performance and reputational risks posed by that vendor, and of the costs of exclusion. As the EU’s Member States shape their exclusion systems consistent with the EU’s procurement directives, the Member States may wish to draw on U.S. strategies for managing risks in contractor qualification: requiring that contractors establish strong internal controls, centralizing the management of vendor exclusions, and using administrative agreements and independent monitors which allow agencies to mitigate risks even as they, and their vendors, avoid the disruption that suspension and debarment may cause. These U.S. strategies align well with the EU procurement directives, and in many cases reflect a natural extension of strategies that EU Member States are already using to address the risks posed by bad or corrupt contractors.

JEL Classification: F55, H57, K23, K42