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Competition

Fighting bid rigging in the health sector in Peru: A review of public procurement at EsSalud

 

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The Social Health Insurance agency of Peru, EsSalud, has invited the OECD to assess the public procurement framework applicable to EsSalud’s purchases in light of the OECD Recommendation and Guidelines for Fighting Bid Rigging in Public Procurement.

The OECD will prepare a report with its assessment and specific recommendations to reinforce competition in tenders run by EsSalud, along with an action plan to implement these recommendations. Together with the national competition agency, INDECOPI, the OECD will train EsSalud’s procurement officials on competition in tenders and how to fight collusion.

As part of the project, the OECD will also draft an inter-institutional co-operation agreement between EsSalud and INDECOPI on the promotion of competition and the fight against bid rigging in accordance with OECD best practices.

EsSalud was created in 1998 and is Peru’s main insurer/provider scheme for employees. It provides health services and social security benefits to the nearly 12 million persons insured in it and manages directly 415 health facilities nationwide. The magnitude of this operation requires clear spending and acquisitions based on the needs of its population and demands quality data and capable personnel.

COMP-EsSalud-project-launch

Project launches in Lima in November 2019 with Antonio Capobianco (Acting Head, OECD Competition Division), Ivo Gagliuffi (former Head of Indecopi), EsSalud's executive president Fiorella Molinelli , Frédéric Jenny (Chair, OECD Competition Committee) and Despina Pachnou (OECD Competition Expert).

Background

‌Bid rigging in public tenders involves firms conspiring to raise prices or lower the quality of their bid. It is an illegal anti-competitive practice which costs governments and taxpayers billions of dollars every year across the world.

A significant share of cartel enforcement in many OECD countries concerns bids rigging cases. This shows that there is awareness of the importance of stopping collusive practices, but also that there is room to improve compliance with competition rules in public procurement and ensure that the public sector buys the right thing, at the right price.  

The OECD Recommendation and Guidelines for Fighting Bid Rigging in Public Procurement were designed to reduce the risks of bid rigging through careful design of the procurement process and to help detect bid rigging conspiracies.

Project stages

The OECD project team will:

1

Analyse the legislation and practices applying to EsSalud’s purchases.

2

Interview national stakeholders to collect facts and insights.

3

Recommend legal and practical improvements, based on international good practices on fighting bid rigging.

4

Provide an action plan to implement the improvements.

5

Provide capacity building in preventing and detecting bid rigging.

6

Draft an inter-institutional co-operation agreement between EsSalud and INDECOPI.

Links

OECD work on Fighting Bid Rigging in Public Procurement

OECD Recommendation on Fighting Bid Rigging in Public Procurement

OECD Guidelines for Fighting Bid Rigging in Public Procurement 

More OECD Competition work with Peru  

OECD Competition work with Latin America  

Latin American and Caribbean Competition Forum  

OECD competition home page

 

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