Fighting Supplier Collusion in Public Procurement: Some Proposals for Strengthening Competition Law Enforcement

By Alison Jones & William E. Kovacic – 

Governments around the world spend an estimated $9.5 trillion of public money purchasing vital goods and services each year. The nature of public procurement systems, however, makes them prone to distortion through supplier collusion (collusive tendering or bid rigging). Where it occurs, unlawful collusive tendering is liable to result in prices for these essential goods and services rising, and their quantity and quality reducing. It thus results in significant detriment to the taxpayer and citizens’ welfare, threatens growth, development and social welfare and reduces confidence in public institutions and public procurement processes. Tackling and countering bid rigging in public procurement should, consequently, be a high priority for a nation. Indeed, significant savings to the public purse and improvements in goods and services may be achieved through prioritizing competition law enforcement in this area and by strengthening and honing antitrust tools that deter firms from engaging in bid rigging.

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