Warning to public buyers amid bid rigging inquiry

1 November 2021

Australia’s competition watchdog has reminded public sector agencies to ensure bidders for public contracts do not discuss bids with each other as it investigates possible collusion in a recent government tender.

The Australian Competition and Consumer Commission (ACCC) said it was concerned some public servants and businesses may underestimate the risk of potentially breaching cartel laws during procurement processes.

The ACCC said it had recently investigated a case where “departmental processes contemplated cooperation by competing businesses on government tenders”. It declined to give more information on the case.

ACCC chair Rod Sims said: “Encouraging businesses to discuss their bids with each other, or to make agreements about who will bid for a particular tender, is likely to amount to cartel conduct which is against the law.

“Cartel activities may start with a small encouragement or an innocent remark, but this can create an environment that enables, condones or facilitates collusive conduct between competing firms.” 

Sims said public sector employees should be aware that cartel conduct by businesses tendering for a public contract was just as illegal as similar behaviour in a private sector contract.

The watchdog encouraged public sector procurement professionals to familiarise themselves with an ACCC guide on cartel deterrence and detection.

“It is also important for prospective bidders to be aware of their obligations and comply with the law,” Sims said.

“We encourage public sector procurement professionals to proactively review their procurement processes and identify and remedy any potentially anti-competitive elements in any procurement procedures, policies or guidelines.”

Australia’s federal government issued 81,174 contracts worth A$53.9bn in 2019-20.

The ACCC said in an unrelated matter, it has launched legal action against Canberra-based building management system company Delta Building Automation.

The watchdog is taking the company to court, alleging it attempted to rig bids for a tender conducted by the National Gallery of Australia.

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