The UK Competition and Markets Authority (CMA) recently published a package of materials (created jointly with the Crown Commercial Service) aimed at helping public sector procurement professionals to spot bid-rigging.
UK public sector spend on goods and services in 2013/14 was £242 billion (£60 billion of this by local government). The CMA is concerned that bid-rigging activities (typically bid rotation, cover pricing and bid suppression) mean that taxpayers are not getting value for money from these contracts. It regards bid-rigging as a particularly serious type of anti-competitive activity which removes the incentive for companies to compete to win a contract, and points to evidence suggesting that cartels - which include bid-rigging activities - often result in overcharges of 10% to 20% and more, costing taxpayers millions of pounds.
In an open letter to procurers the CMA explains the issues and provides a free e-learning tool and further advice (including a 60-second summary and video) to help purchasers detect suspicious activities and avoid becoming victims of bid-rigging.
Risks for tenderers
Competition authorities elsewhere are also taking steps against bid-rigging. The Slovak Antimonopoly Office has confirmed that it undertook so-called "dawn raids" in early June at the premises of laboratory technology suppliers suspected of bid-rigging in a tender for a biomedicine contract valued at over €3 million.
Tenderers involved in bid-rigging risk fines of up to 10% of turnover in their previous accounting period. In the UK, individuals implicated in bid-rigging may be charged with the criminal "cartel offence" and face prison terms of up to 5 years and/or unlimited fines.