The Implications of Negotiated Settlements on Debarment in Public Procurement : A Preliminary Inquiry

Corporate criminal investigations and subsequent convictions will often lead to further consequences for a corporation, including reputational damage and additional administrative/civil law based actions and penalties, such as debarment from future government contracts (public procurement) or the termination of existing government contracts. However, in some jurisdictions, corporations guilty of criminality are entering into negotiated settlements in the form of deferred or non-prosecution agreements, which often mean the corporation avoids criminal prosecution and conviction. This chapter examines the implications of these settlement actions on the debarment system and whether these settlements undermine the debarment system and anti-corruption enforcement in public procurement. The chapter highlights that the goals of a debarment system, and the objectives of settlement actions are often mutually reinforcing, and although there are similarities in the nature of the factors that the debarment system and the system for settlements consider in permitting firms to avoid the most severe consequences of enforcement; there is a need for a uniform approach for the sake of coordinated responses in the fight against corporate corruption