Public Procurement and Property

Pro-competitive procurement will help you meet ambitious targets

June 10, 2022 by Guest Blogger No Comments | Category buyers, Guest Blog, Procurement news

Cheating or competing? It is your business to know the difference. To highlight this important procurement subject we welcome a guest blog from the Competition & Markets Authority (CMA) – written by Sean McNabb, Director, CMA Cartels Enforcement.

The CMA is  rolling out a programme of engagement with public procurers. This programme aims to share learnings from real life cartel cases, drawing out advice on common bid-rigging red flags.

The CMA’s freely available resources will help you to better spot and report suspect activity in your procurement projects. Read on to find out more.

Sean McNabb, Director, CMA Cartels Enforcement:

Every penny spent in public procurement counts, and now more than ever it must represent true value for money.

Smart public procurement has the power to drive economic recovery. It can support ambitious net zero goals and help navigate the economic pressures that we are all facing.

Fairness in procurement

In his foreword to the latest Scottish Government Procurement Strategy, Director of Scottish Procurement and Property, Nick Ford, talks about a ‘Fairer Scotland’ with ‘Fair Work’ as a fundamental foundation to success.  The concept of fairness in procurement is equally integral to the work we at the Competition & Markets Authority (CMA) do.  Ensuring fair competition and open dynamic markets is at the heart of our operations and it is our job to root out and punish businesses who don’t play fair. Businesses who look to undermine competition for personal gain, for example by rigging bids for contracts in public procurement. This can increase prices by 20% or more.  Indeed, we prioritise cases where we find evidence of harm to public sector contracts.  Our priority is to protect consumers from the ill effects of anti-competitive practices, whether this is through inflated costs or poorer quality goods and services.

Scotland is in a positive position of having significant collective spending power that, to coin Nick’s terminology,  has the capability to ‘deliver sustainable and inclusive economic growth.’

However, from my experience as an investigator into cartel conduct, where there is money to be had, illegal opportunism can creep in.  This risk is especially high now as many suppliers are under economic strain for a number of reasons. These could include the fallout from the pandemic, ongoing supply chain challenges post EU Exit and economic pressures emerging from the crisis in Ukraine.  When businesses are under stress and desperate to protect margins – they may be tempted to cut corners and break competition rules.

Bid-Rigging

Bid-rigging, where suppliers get together to decide amongst themselves what they will bid and who will win a contract, remains a key risk in public procurement.  As said, it can increase prices by at least 20% and sometimes more and those involved will often go to great lengths to hide wrongdoing.  However, there are some common red flags you should be alert to.

We are now rolling out a programme of engagement with public procurers. This programme aims to share learnings from previous cartel cases, drawing out advice on common bid rigging red flags. Participants will be able to better spot and report suspect activity within procurement projects.

At the CMA we have taken a number of cases that have affected public bodies across the UK. We have been particularly active in the construction sector – issuing a total of £67 million in fines across 5 separate cartel cases.  A number of directors have been disqualified and there have been two criminal convictions.

Visit the CMA’s Cheating or Competing campaign page to access freely available support, including:

• CMA e-learning module (takes 30 mins to complete)
• 1-pager for public sector procurers on the subject of illegal collusion in procurement and bid rigging red flags
• ‘Cartel Quiz’ to see if you can spot cartel behaviour.

Never confront a supplier yourself as you could risk tipping them off to a future investigation. Instead, contact the CMA to raise concerns.

You might not be sure if you have encountered bid rigging. Even if something simply doesn’t feel right or was not what you were expecting, contact the CMA. What you have seen may link with other concerns or suspicions which have been reported to us. Rest assured, your suspicions will be taken seriously, at the CMA we have strong powers to investigate them.

Contact the CMA

Bid rigging can cost the Scottish taxpayer money. Be alert to the possibility that your suppliers could be rigging bids and report any suspicious behaviour to the CMA via its Cartels Hotline 020 3738 6888 or email Cartelshotline@cma.gov.uk

For further information on public procurement in Scotland please visit www.gov.scot/procurement

Please email enquiries to scottishprocurement@gov.scot

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Tags: bid rigging, CMA, Competition & Markets Authority, fair competition, guest blog, open and connected, public sector procurement

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