Can a Failed Care Contract Stop You Winning the Next One?

A failed care contract can stop you winning the next one, but only in defined circumstances. Under the Procurement Act 2023, poor performance is a discretionary exclusion ground: a council may exclude a supplier that did not perform a relevant contract to the authority's satisfaction, was given a proper opportunity to improve and failed to do so. It also has to find that the problem is continuing or likely to recur, and you have the right to make representations first.

At a glance

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- The ground: Procurement Act 2023, Schedule 7, paragraph 12(3). Poor performance on a relevant contract, after a proper opportunity to improve.

- Breach of contract: paragraph 12(5) treats a breach as sufficiently serious where it leads to termination or partial termination, damages, or a settlement agreement.

- The test: section 57(2). You are only excludable if the circumstances are continuing or likely to occur again.

- Self-cleaning: section 58. Evidence such as changing staff or management, or putting procedures and training in place, counts. You must be given a reasonable opportunity to make representations.

- Look-back: 5 years, and 3 years for breach of contract. Poor-performance events before 24 February 2025 are ignored.

- Sources: Schedule 7, paragraph 12, section 57, section 58.

Poor performance exclusion: what the Procurement Act 2023 actually says

Exclusion under the Procurement Act 2023 runs in two tiers. Schedule 6 sets out mandatory grounds, such as certain criminal convictions. Schedule 7 sets out discretionary grounds, and poor performance sits there. Discretionary means the council decides whether to exclude, and only after testing the facts against the Act.

Paragraph 12(3) of Schedule 7 covers a supplier that "has not performed a relevant contract to the regulated authority's satisfaction, was given proper opportunity to improve performance, and failed to do so". All three elements matter. A single missed visit log, a poor contract monitoring visit or a disagreement over a fee uplift does not, on its own, meet that wording.

Paragraph 12(5) deals with breach of contract. A breach is treated as sufficiently serious if it results in termination or partial termination of the contract, damages, or a settlement agreement.

The continuing or likely to recur test

Section 57(2) is the protection most care providers overlook. A supplier is only excludable if the circumstances giving rise to the ground "are continuing or likely to occur again". That shifts the question from what happened to what has changed since.

Section 58 lists the factors the council may consider, including evidence of "changing staff or management, or putting procedures and training in place". Before deciding, the council must give you a reasonable opportunity to make representations.

For a care provider, that evidence looks like:

• a new Registered Manager or Nominated Individual, with dates
• a revised medication, rota or call-monitoring procedure, with the audit results that followed
• training completion figures for the competencies the original contract monitoring criticised
• a re-inspection outcome from CQC or the council's own quality team

How long a poor performance record follows you

Schedule 7, paragraph 15 sets the look-back. Discretionary grounds generally look back 5 years, and breach of contract looks back 3 years. Poor-performance events before 24 February 2025, when the Act came into force, are ignored.

The Act also lets a Minister place suppliers on the debarment list under section 62. Debarment is a separate, central process and is not the same as one council's exclusion decision.

Why light touch care contracts are treated differently

Most adult social care contracts are light touch contracts. Two provisions apply differently to them:

• Publication of breach and poor performance. Section 71 requires councils to publish information about breach or poor performance within 30 days, but subsection 71(5) "does not apply in relation to a light touch contract".
• Key performance indicators. Section 52 requires at least 3 KPIs to be set and published for contracts over £5m, but subsection 52(6) excludes light touch contracts.

The poor performance exclusion ground in paragraph 12(3) still applies to light touch contracts. A care contract that ended badly can still be raised in your next tender, even if it was never published nationally.

What this means for your next bid

• Answer the exclusion declarations accurately. Your Central Digital Platform core supplier information includes exclusion grounds information under regulation 12 of the Procurement Regulations 2024. Our guide to Central Digital Platform registration for care providers covers the declarations.
• Keep a self-cleaning file ready. Hold the management changes, procedures, training records and re-audit results in one place, so representations can be made within days, not weeks.
• Use contract monitoring evidence positively. Improvement plans that closed with verified results are evidence of quality governance, not just evidence of past failure.
• Check your quality answers match the record. A council that has your monitoring history will notice if your method statement claims a control that was found missing.

Frequently asked questions

Can a council exclude a care provider for poor performance on a previous contract?

Yes, under Schedule 7, paragraph 12(3) of the Procurement Act 2023, where the supplier did not perform a relevant contract to the authority's satisfaction, was given a proper opportunity to improve and failed to do so. It is discretionary, and the council must also find the circumstances are continuing or likely to recur.

What is self-cleaning under the Procurement Act 2023?

Self-cleaning means showing the circumstances behind an exclusion ground are not continuing and are unlikely to recur. Section 58 lists factors including changes of staff or management and new procedures and training. You must be given a reasonable opportunity to make representations before a decision.

How long does poor performance count against a supplier?

Schedule 7, paragraph 15 sets a look-back of 5 years for discretionary grounds and 3 years for breach of contract. Poor-performance events before 24 February 2025 are ignored, because that is when the Act came into force.

Do councils publish poor performance on care contracts?

Section 71 requires publication of breach or poor-performance information within 30 days, but subsection 71(5) does not apply to light touch contracts, which covers most care contracts. The exclusion ground itself still applies to them.

Can TenderLab help us respond to an exclusion concern?

Yes. We review the exclusion declarations, gather the evidence of what has changed, and make sure your quality answers are consistent with the record. Most of our writers began on the frontline, so we know what credible improvement evidence looks like to a commissioner.

Do you write the full quality response as well?

Yes. We write the full response against every section of the specification and award criteria, and a separate quality assurance team evaluates the draft before you review it.

Rebuilding after a difficult contract? TenderLab works with health and social care providers only, with a 92% win rate across 200+ submissions. TenderLab Ltd, Companies House 17184263. Book a free consultation.

Related reading

• Central Digital Platform registration for care providers
• Provider Selection Regime or Procurement Act 2023: which rules govern your care tender
• Case study: Essex Live at Home Tier 2 Framework, a Tier 1 miss recovered into 5 lots

Further reading

• Procurement Act 2023, Schedule 7
• Procurement Act 2023, section 57 and section 58
• Procurement Act 2023, section 71