Contracting Authorities Inability to Fight Bid Rigging in Public Procurement: Reasons and Remedies
“This article has been included in the book “Integrity and Efficiency in Sustainable Public Contracts. Balancing Corruption Concerns in Public Procurement Internationally”, Gabriella M. Racca - Christopher R. Yukins (ed. by), Bruxelles, Bruylant, 2014.
13 Pages Posted: 30 Jan 2015 Last revised: 6 Mar 2015
Date Written: January 28, 2015
On a functional basis, contracting authorities possess a twofold public-private nature. As State prominent parts, mostly Administrations, they are public bodies, holding prerogatives and acting as Regulators to ensure that the contracting activity complies with public contracting laws and procedures. But by appealing to the market to purchase goods and services, those authorities are also economic operators and act as any firm. It is in this very concept of clients or customers of an economic activity that they are bound up to fulfill the Competition law requirements.
The overlapping of Regulation and Antitrust law over a particular market usually poses the problem of choosing one or the other to tackle anticompetitive behaviours. This is a race for hooking the prey. Both are entitled to intervene, since they have got among their objectives the protection of competition on sectorial markets, but operate at different levels (ex ante/ex post).
This paper aims at proposing feasible means for the contracting authority to tackle collusion alongside the tender process. These means should contribute to avoid bid rigging or, if failed, help the Competition agency to prove the anti competitive behaviour. A breakthrough in this way is the Directive on Public Procurement, since it entitles the awarding powers to expel those candidates with sound evidences of rigging before or during the contracting procedure. This formula seems to bring the solution back to Public Procurement, but favours errors Type I and Type II (false positives and negatives).
Keywords: public procurement, bid rigging, non-collusion commitment, exclusion, demotion
JEL Classification: L40, L50
Suggested Citation: Suggested Citation