What is the duration and scope of the exclusion of a company following a criminal conviction?

A parliamentary question raises the question of whether or not to automatically exclude a convicted company in the event that a criminal court only imposes a fine on a company.

Two distinct situations of exclusion from access to public procurement

The prohibition of an economic operator to compete for a public contract can result from two different situations. It may result, first of all, from an additional penalty imposed by the criminal judge on the basis of articles 131-10 and 131-39 of the Penal Code. It may, moreover, result from the “automatic” exclusion mechanism for conviction in the main for one of the offenses referred to in article L. 2141-1 of the Public Contracts Code. The Constitutional Council confirmed (decision no. 2014 on the award of public contracts and, on the other hand, that automatic exclusion is not a sanction, but a measure designed to ensure the effectiveness of public contracts and the proper use of public funds.

Consequently, it does not disrespect the principles of necessity and individualization of penalties or the right to an effective judicial remedy, guaranteed respectively by articles 8 and 16 of the Declaration of the Rights of Man and of the Citizen. It is also necessary to take into account the jurisprudence to measure the scope of these so-called “automatic” exclusions, which differ from a conviction by a final judgment to an express penalty of exclusions. Indeed, the Court of Justice of the European Union and the Council of State have confirmed that the resulting ban on tendering does not prevent economic operators from demonstrating that, since committing acts leading to exclusion, they have taken corrective measures capable of restoring their reliability ( CJEU, June 11, 2020, No. C-472/19; Council of State, October 12, 2020, No. 419146).

Thus, irrespective of the case in which the economic operator has been excluded from public procurement procedures by a final judgment, Directive 2014/24/EU allows it to provide the contracting authority with all evidence demonstrating that the measures adopted are of a to prevent further infringements and who can participate in the process despite the existence of a ground for exclusion.

An exclusion that may extend to subsidiaries of a parent company

As regards the exclusion of subsidiaries of a parent company convicted of concealing favoritism, the conviction of the parent company, as a legal person, does not automatically imply the exclusion of its subsidiaries from public procurement procedures. However, a subsidiary may also be excluded from the procedure for the same reason as its parent company if the contracting authority finds that it lacks commercial autonomy in relation to the condemned parent company, due to the close relationship between its shareholders or its managers (Council of State, December 8, 2020, No. 436532).

In addition, the conviction of a natural person for one of the crimes provided for in article L. 2141-1 of the Public Contracts Code may also result in the exclusion of a subsidiary. If a convicted natural person is a member of the management, administration, management or supervisory body of a subsidiary, or has powers of representation, decision or control over a subsidiary, the latter is excluded from the contracting procedure as long as that natural person performs his duties.

Reference text: Written Question No 43616 by Ms. Anne-France Brunet (La République en Marche – Loire-Atlantique) of 18 January 2022, Reply published in JOHN from May 3, 2022

Leave a Comment