Reasons To Blacklist Contractors

An individual or organisation is generally blacklisted in the event that they are in breach of an agreement, are under suspicion or has fallen out of favour due to particular events. As means of penalising an individual or organization they are placed on a list which indicates the reasons for them being blacklisted. To exemplify, if a building contractor could not meet agreed deadlines and did shoddy work when managing a building project, that building contractor can be blacklisted. In this case blacklisting has a dual purpose in that while it penalises the contractor it also warns possible future clients of the ill-practices that the contractor is known to engage in.

Blacklisting a contractor can have a very adverse influence on the business of a contractor. The reason for this is that when a contractor is blacklisted that contractor cannot bid for any contracts for a given period. Staying off a blacklist will thus be imperative for contractors due to the financial implication it poses.  

The South African Department of Public Works have been known to take a particularly strong stance against contractors who fail to meet agreed upon deadlines and have threatened to blacklist all tardy contractors. Slow work from contractors has resulted in deadlines not met which results in buildings not completed in time and this, in turn, has a negative impact on service delivery. To exemplify, the longer it takes to complete building of a hospital the longer it will take to provide a service to the public at this hospital.

While the inability to meet deadlines is a key factor in the blacklisting of contractors other reasons include providing falsified tender eligibility documents, inability to do the work tendered for, providing work that is below the agreed standards, corrupt practises and exhibiting anti-competitive behaviour. While on the one hand it can be considered as a threat to the financial well-being of a contractor it can be seen as a challenge to meet the agreed targets. Contractors who view it as a challenge will distinguish them from bad contractors who see it as a threat.

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