Debarment Regime: frequently asked questions

A debarment regime establishes grounds, process and governance that allows us to work with suppliers to improve business practices. In the worst cases of wrongdoing, it prevents suppliers from working with us.

Why have a debarment regime?

We must protect the use and expenditure of public funds and maintain public confidence in our contracting. This can only be done if all parties involved in public procurement work together to create supply chains founded on sound laws, transparent procurement policies and responsible business practices.

We recognise we can do better, but we can’t do it alone. We need our suppliers to work with us to improve business practices. This will help ensure there is a well-functioning, competitive market of suppliers to partner with us to deliver important services.

One way we can ensure we only contract with suppliers that run their businesses responsibly, is to exclude irresponsible suppliers.

What are the benefits of a debarment regime?

State agencies can have increased confidence that they are dealing with suppliers that are fair and honest.

Suppliers have reassurance that they are operating on a level playing field and do not need to engage in corruption to keep up with the competition.

The WA Government will get what it pays for when financing procurement by removing potential losses due to criminal activity.

What gives the State the power to do this?

The Regime stems from the Procurement Act 2020 (the Procurement Act) and the Procurement (Debarment of Suppliers) Regulations 2021 (the Regulations).

When did the Regime start?

The Regime started on 1 January 2022 but is retroactive so it may affect contracts in place before 1 January 2022.

How effective are debarment regimes?

It’s difficult to measure exactly how well debarment regimes work to reduce fraud and corruption, and improve business responsibility. However, Transparency International claims that exclusion can dissuade people from considering wrongdoing when the process of exclusion is transparent and certain in its application.

The Regime’s transparent processes will help ensure consistency and equity in decision making around exclusion.

Are debarment regimes used elsewhere?

Yes, debarment regimes are used across other entities and nations including:

Brazil
Canada
Chile
Germany
the European Commission
the United Kingdom
the United States of America
the World Bank.

Who manages the Regime and makes decisions?

The Department of Finance is responsible for administering the Regime on behalf of the WA Government. Finance’s Director General (the decision maker) is responsible for making debarment and suspension decisions and entering supplier undertakings.

Is the final decision discretionary?

Yes. The decision maker decides in the public interest. This may mean that conduct qualifying a supplier to be debarred or suspended does not result in either outcome.

Who is a supplier under the Regime?

The Regime applies to suppliers that supply, and subcontract to supply, goods, services, community services and works to the WA Government. It also applies to suppliers and subcontractors that propose to supply to the State.

Suppliers may also be excluded for the conduct of their senior officers. Affiliates (related entities) may also be excluded.

Can a natural person be debarred?

Yes, the Regime covers all persons and entities that supply or propose to supply to the WA Government. The type of business structure used by a supplier (such as sole trader, partnership, trust, company or other association or body) does not change the Regime’s application.

What if I supply as a not-for-profit organisation?

The Regime applies to not-for-profit organisations.

Will there be consequences for other entities that have a senior officer or ownership in common with a debarred supplier?

Possibly. The Regime includes the concept of ‘affiliates’ of debarred suppliers. The Regulations define an affiliate as an entity that:

controls or is controlled by the debarred supplier, or
is a related body corporate of the debarred supplier, or
has a senior officer who is also a senior officer of the debarred supplier, or
is the successor (whether immediate or not) to, or of the whole or part of the business of, the debarred supplier.

Debarment

Why might a supplier be debarred?

See the Regulations.

There are 3 categories of debarment conduct:

Category A debarment conduct
Category B debarment conduct
Other debarment conduct.

Category A debarment conduct is the most serious conduct

Conduct in Category A includes offences and contraventions of specific provisions of the State and Commonwealth legislation listed in Schedule 1 of the Regulations, most of which are offences that may lead to a conviction under criminal law.

Category B debarment conduct is less serious conduct

Conduct in Category B includes offences and contraventions of the State and Commonwealth legislation listed in Schedule 2 of the Regulations.

While the decision maker reserves the right to exclude a supplier based on Category B debarment conduct, we are likely to offer the supplier a supplier undertaking for this conduct unless the conduct is ongoing or unable to be remediated.

The decision maker has the discretion to offer a supplier a supplier undertaking. The undertaking may establish a framework for remedial action by the supplier or limit the consequences of suspension or debarment, provided that the supplier complies with the undertaking.

Other debarment conduct

This category includes conduct that is not within Category A or B, but is likely to have a material adverse effect on the integrity of or public confidence in government procurement.

Examples of other debarment conduct include debarment under a regime operating outside WA or failure by a supplier or senior officer to cooperate with an investigation under the Regime.

How long does debarment last?

For Category A debarment conduct, suppliers may be debarred for up to 5 years.

For Category B debarment conduct and ‘other debarment conduct’, suppliers may be debarred for up to 2 years.

Suspension

When can a supplier be suspended?

A supplier may be suspended while the decision maker is carrying out an investigation but only when investigating potential Category A debarment conduct by the supplier or a senior officer of a supplier. The decision maker must be satisfied that suspension is in the public interest.

Affiliate(s) of the supplier may also be suspended if the decision maker is satisfied it is in the public interest.

How long can suspension last?

Suspensions may last for an initial term of up to 12 months. Where an official investigation into the conduct is still pending or ongoing, the decision maker can extend this period in increments of 6 months up to the maximum suspension period of 5 years.

The decision maker must terminate a suspension if the relevant official investigation ceases, or a decision is made to debar or not debar the supplier.

Conduct

Does it matter where the conduct occurred?

No. The conduct specified in the Regulations is conduct found in WA and Commonwealth laws. However, the Regime includes a provision that allows the decision maker to exclude suppliers based on conduct in other jurisdictions provided the conduct is ‘of a kind’ described in the Regulations.

If another State or jurisdiction debars a supplier, do we automatically apply debarment in WA or is it judged independently?

Debarment is never automatic. If a supplier is debarred under another regime, the decision maker will consider the case for debarment under the WA Regime based on the conduct being ‘other debarment conduct’. The decision maker must be satisfied that debarment of the supplier under the WA Regime would be in the public interest before debarring the supplier under the Regime.

How far in the past can the actions of a supplier or senior officer be considered?

Up to 3 years:

since the conduct occurred, or
since a conviction or penalty was imposed, or
since the supplier was debarred under another regime, or
in the case of an affiliate, since the principal supplier was debarred.

Can I be excluded for not performing a particular contract well or for not complying with government policy such as the WA Industry Participation Strategy?

In most instances, no. Non-compliance with contractual obligations in specific contracts (such as local content requirements) is best dealt with contractually.

The Regime is aimed at broad business responsibility, rather than performance on individual contracts.

Investigations

How will I know if I am under investigation for debarment conduct?

The decision maker must issue a show cause notice to a supplier under investigation for debarment conduct, before making a debarment decision. That notice must specify the reasons for the investigation, relevant procedures and the consequences of debarment. The supplier will be given at least 7 days to make submissions in response to the notice.

If the supplier chooses to make submissions, they may include any information that they believe raises a genuine dispute over the material facts, and may request to present the case in person.

If the supplier responds during the specified period, the decision maker must consider those submissions before making the debarment decision.

How will I know if I have been suspended or debarred?

If a supplier is suspended or debarred under the Regime, the decision maker must notify the supplier when the decision is made.

Notice of suspension or debarment decision must specify the reasons for the decision, the duration of suspension or debarment and the supplier’s rights to seek review by the State Administration Tribunal.

Consequences

What information will be publicly available?

The decision maker is required to maintain a public debarment register. The register is published on Tenders WA.

In the event of debarment, the debarred supplier’s name, business identifier, and duration of the debarment will be listed on the register.

At the end of the debarment period, the supplier’s details will be removed from the register.

The public register only names debarred suppliers and does not name suspended suppliers.

What are the consequences for existing contracts of a supplier being suspended or debarred?

If a State agency has existing contracts with a debarred supplier, those pre-existing contracts may continue or the State agency may choose to terminate the contract. The right to terminate only arises when a supplier is debarred (that is, it does not arise when a supplier is suspended). State agencies must not extend the scope or duration of contracts with debarred or suspended suppliers.

If a State agency has an existing contract with a non-excluded supplier who has subcontracting arrangements with an excluded subcontractor, that pre-existing contract may continue.

In both cases, if your State agency has an ongoing contract which involves an excluded supplier, you are encouraged to review your contractual rights and your approach to contract management during the exclusion period.

What are the consequences for new contracts of a supplier being suspended or debarred?

Suppliers that are suspended or debarred cannot seek or be awarded new contracts and cannot act as agents or representatives of other suppliers.

Suppliers that are not suspended or debarred cannot seek or be awarded new contracts if their offer includes subcontracting arrangements with a suspended or debarred supplier.

A State agency may seek permission from the decision maker to award or extend a contract with a suspended or debarred supplier if they can establish that exceptional circumstances exist. The decision maker must be satisfied that awarding or extending the relevant contract is in the public interest.

Does ‘contract’ include standing offers, contracts formed under standing offers, leases, and service agreements?

Yes.

Does debarment or suspension apply to the whole company or only the division at fault?

Debarment or suspension applies to all divisions or equivalent sub-sectors of the supplier unless the decision maker enters into a supplier undertaking with the supplier that limits the consequences of debarment or suspension to specific parts of the supplier’s operations.

Are there extra costs associated with this regime for suppliers?

No, unless you’re under investigation.

Suppliers under investigation may need to provide information to the decision maker. If a supplier undertaking is agreed between the decision maker and the supplier, the supplier must also comply with any requirements in the undertaking including for example, the conduct of an audit, and pay for the costs of compliance.

Can a supplier limit the consequences of suspension or debarment?

The decision maker may offer a supplier a supplier undertaking, which may include terms that limit the consequences of debarment of suspension.

The decision maker has complete discretion whether to offer a supplier undertaking and the terms included in a supplier undertaking. Such an offer is much more likely to be made for Category B debarment conduct or other debarment conduct, than for Category A debarment conduct.

Decision review, referrals and other policies

Can I appeal a suspension or debarment decision?

A supplier may apply to the State Administrative Tribunal to review a suspension or a debarment decision.

Section 36(8) of the Procurement Act states that damages are not payable.

Can I report a supplier that is acting irresponsibly?

Not at this time. Only investigative agencies of the State or Australian Government may provide us information (or we may start an investigation of our own initiative). This is because we will rely on agencies to use powers in their own areas of investigation to ensure the debarment ground is sufficiently proven.

If you want to provide information on a supplier acting irresponsibly, please contact the agency responsible for investigating the conduct or managing the relevant contract. For example, if you think a supplier is not paying their employees award wages, please contact the Fair Work Ombudsman or the Department of Mines, Industry Regulation and Safety.

How does the Regime support the Buy Local Policy and small businesses?

The Regime ensures that responsible suppliers will experience a level playing field.

When will the Regime be reviewed?

We undertake to review the Regime as part of the review of the Procurement Act to be undertaken as soon as practicable after July 2025.

How will the list of Acts in the Regulations be updated as legislation is amended?

Technically, they don’t have to be updated because section 16 of the Interpretation Act 1984 applies. Section 16 states that a reference in a written law to a written law shall be deemed to include a reference to such written law as it may from time to time be amended.