Supplier cartel clampdown

10 August 2008
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11 August 2008 | Helen Gilbert

Buyers have been urged to draw up "checklists" to prevent cartels forming among suppliers.

The Institute of Commissioning Professionals (IoCP) has called on purchasers in the private and public sector to introduce more questions for vendors about Competition Act compliance during selection, to avoid cartels forming.

It follows the ongoing investigation by the Office of Fair Trading, which accused 112 construction companies of rigging tenders earlier in the year (News, 24 April).

The firms were alleged to be caught up in cover-pricing - where competing contractors collude to fix a high price for a contract, leaving buyers with a false impression of competitiveness.

Doug Forbes, director of the IoCP, told SM that purchasers should apply the Competition Act in the same way as the health and safety legislation.

He said that checking compliance and asking questions - such as whether suppliers have nominated officers to ensure they are competing fairly for tenders - at early stages would help make processes more transparent.

"It would encourage companies to make sure they are not forming cartels," Forbes said. He added that the construction industry was starting to do this but said public procurement professionals were 'still not asking enough questions'.

An OFT spokesman agreed with Forbes. "We would encourage procurers to ask questions about competition compliance to tenderers where appropriate," he said.


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