A free online learning resource to help procurement professionals spot the signs of bid rigging has been released by the Competition and Markets Authority (CMA) and the Crown Commercial Service.
The CMA said bid rigging, a form of anti competitive behaviour where companies collude during the tendering process, could inflate the price of contracts by 10-20% or more.
The online module, made available by CIPS and the Local Government Association (LGA), is meant to take no longer than 40 minutes and aims to teach procurement professionals how to spot the signs of bid rigging and what to do if you suspect bid rigging is taking place.
In an open letter to procurement professionals, the CMA said that every year “billions of pounds are spent procuring goods and services in the UK” and called bid rigging “a form of cartel”.
It added: “[bid rigging] removes the incentive for companies to compete to win a contract, which in turn means purchasers do not get true value for money.”
In a statement John Kirkpatric, senior director of advocacy at CMA, said bid rigging cost “taxpayers and consumers many millions of pounds”, adding the new learning resources would “help procurers spot cases and root out attempts to cheat before they cause any damage”.
As well as the online learning tools aimed at all procurement professionals, the CMA has also released guidelines and a short animated video specifically for the public sector.
David Noble, group CEO, CIPS, said: “This is too important an issue to allow these bad behaviours to colour the good that sound procurement and supply chain management brings to the public sector.”
Companies taking part in bid rigging can collude in many different ways. They can take turns to submit the lowest bid, arrange for one or more of the bidders to submit an artificially high bid or agree to not compete for a tender, usually in exchange for some other financial gain such as an agreement to receive subcontracted work.
The CMA advises anyone who is suspicions of bid rigging taking place to call the cartel's hotline.