Bid rigging happens when groups of firms conspire to raise prices or lower the quality of goods, works or services offered in public tenders. OECD countries spend approximately 13% of their GDP in public procurement. Governments can help fight bid rigging by training their procurement officials to design tenders that prevent collusion, and detect conspiracies amongst bidders in the tender submissions.
The risks of bid rigging can be reduced if public tenders are carefully designed and procurement officials duly trained to learn how to detect bid rigging conspiracies during the procurement process.
The OECD Guidelines for Fighting bid rigging in Public Procurement include guidance on best practices for designing public procurement processes identifying suspicious bid and pricing patterns, as well as suspicious behaviors. The Guidelines are currently being revised to accurately reflect new existing challenges.
Beyond the training of procurement officials, institutionalised co-operation between competition agencies and procurement authorities (as well as other relevant bodies, such as anti-fraud authorities and prosecutors) is a key step in the fight against bid-rigging.
This co-operation is mutually beneficial. Procurement officials can help open investigations by reporting suspicious behaviors and patterns, and their technical insights can enrich the quality of enforcement investigations. Meanwhile, competition authorities can help procurement officials mitigate the risk of bid-rigging by advising on pro-competitive tender design.
Leniency programmes, though effective, may face limitations in certain socio-economic contexts. To address this, whistleblower systems can be an alternative detection tool offering anonymity and rewards in exchange for vital bid-rigging information.
Meanwhile, digital screens utilize advanced analytics to scrutinise electronic procurement data and flag potential collusion. These screens require good quality data, as well as staff trained with the necessary technical skills. Cooperation and agreements between competition and procurement authorities in this area should focus on the right format to store procurement data so that it is useful for bid-rigging detection.
Nineteen OECD member countries have criminal sanctions against all forms of hard-core cartels, including bid rigging. Another 11 member countries criminalise bid rigging, while other cartel activities are subject to administrative sanctions only.
Competition authorities have been more and more engaged in the fight against bid rigging. The OECD noted an increase of 9.7% in bid-rigging cases across many jurisdictions between 2021 and 2022.
In 2023 the OECD Council adopted a Recommendation on Fighting Bid Rigging in Public Procurement that calls for governments to assess their public procurement laws and practices at all levels of government in order to promote more effective procurement and reduce the risk of bid rigging in public tenders.
The Recommendation is a step forward in the fight against collusion in public procurement that the OECD has been leading for a long time especially through the 2009 Guidelines for Fighting bid rigging in Public Procurement and the work related to its dissemination worldwide.
The Guidelines, currently under revision, include guidance on best practices for designing public procurement processes identifying suspicious bid and pricing patterns, as well as suspicious behaviours.
The OECD reviews national and sector-specific public procurement regimes, to guide and support countries in combatting collusive practices.
As part of these reviews or independently, the OECD develops wide-ranging capacity building programmes on fighting bid rigging in procurement, including workshops and training manuals, for public procurement, budget and internal control officials.
In September 2024, the OECD started a project funded by the European Union to help Austria, Bulgaria, Croatia, Cyprus, Greece and Romania fight bid rigging in public procurement, increase compliance with competition law and promote competition in public contracts. Read more
See examples of other in-country projects:
The OECD reviews national and sector-specific public procurement regimes, to guide and support countries in combatting collusive practices. As part of these reviews or independently, the OECD develops wide-ranging capacity building programmes on fighting bid rigging in procurement, including workshops and training manuals, for public procurement, budget and internal control officials.
For more information on the OECD work on Fighting Bid Rigging in general please contact: Despina.PACHNOU@oecd.org.
