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Rule 28:
Reasons to exclude a supplier

Primary requirement

  1. Agencies may exclude a supplier from participating in a contract opportunity if there is a good reason for exclusion.

Application

  1. Reasons for exclusion include:
    1. bankruptcy, receivership or liquidation
    2. making a false declaration
    3. fraud, corruption and anti-competitive behaviour (for example, bid-rigging, bribery including foreign bribery, collusion, etc)
    4. a serious performance issue in a previous contract
    5. a conviction for a serious crime or offence
    6. professional misconduct
    7. an act or omission that adversely reflects on the commercial integrity of the supplier or offends against the Supplier Code of Conduct
    8. failing to pay taxes, duties or other levies
    9. a threat to national security or the confidentiality of sensitive government information
    10. the supplier is designated as a terrorist entity in New Zealand under the Terrorism Suppression Act 2002
    11. human rights violations associated with the supplier or in the supplier’s supply chain
    12. suppliers sanctioned by the New Zealand government
    13. failure to disclose or falsely reporting beneficial ownership, where requested
    14. any matter that materially diminishes an agency’s trust and confidence in the supplier.
  2. Agencies must not exclude a supplier unless it has evidence supporting the reason for the exclusion.
  3. Agencies must notify a supplier of its exclusion and the reasons for it.

More information

Reasons for exclusion

The list included in Rule 28.2 is a non-exhaustive list of reasons for exclusion. 

Bid-rigging

If you discover that the same errors appear in responses from different suppliers (like misspelled words or the same mathematical mistakes), this may indicate that these suppliers have shared information (for example, cut and pasted content from each other’s responses) and may be acting anti-competitively.

For more examples and guidance on detecting and preventing bid-rigging, see the Commerce Commission's fact sheet.

 How to recognise and deter bid rigging [PDF, 1.28 MB] – Commerce Commission

A conviction for a serious crime or offence

This includes a conviction for foreign bribery (getting an advantage in an international transaction by offering bribes to foreign officials). Staff engaged in procurement need to be aware of foreign bribery, potential corrupt actions or other serious offences. 

The Organisation for Economic Cooperation and Development has more information about fighting foreign bribery.

Fighting foreign bribery – OECD

The Serious Fraud Office has more information about New Zealand law relating to bribery.

Serious Fraud Office 

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