Fighting bid rigging in government contracts: Mexico-OECD partnership

 

    OECD releases report on improving procurement practices in Mexico's social services agency (ISSSTE), 14 November 2013

OECD applauds Mexico's decision on reverse auctions for medicines | Spanish version, 22 October 2013

Bid rigging involves groups of firms conspiring to raise prices or lower the quality of the goods or services offered in public tenders. Although illegal, the anti-competitive practice is widely applied and continues to cost governments and taxpayers billions of dollars every year across the world. The OECD Guidelines for Fighting Bid Rigging in Public Procurement aim to make bid rigging more difficult for contractors and help government officials identify suspicious bidding.

 

Mexico has partnered with the OECD to improve its procurement practices and step up its fight against bid rigging. When Mexico's Social Security Department signed a Memorandum of Understanding with the OECD and Mexico's Competition Commission in January 2011, it became the first public agency in Mexico (and in the world) to formally commit to adopt and implement the OECD Competition Committee’s Guidelines for Fighting Bid Rigging in Public Procurement.

  DOCUMENTS AND LINKS

OECD Guidelines for Fighting Bid Rigging in Public Procurement

 

Strengthening the competition and regulation framework in Mexico

 

OECD Mexico Centre website


Mexican State’s Employees’ Social Security and Social Services Institute (ISSSTE)

The State’s Employees’ Social Security and Social Services Institute (ISSSTE) is the second largest Mexican social service agency in terms of the annual volume of goods and services purchased and the fifth largest federal procurement group.

 

In order to actively promote genuine competition in the purchasing of goods and services and to continue its fight against bid rigging in public procurement, ISSSTE signed an agreement with the OECD in June 2012. Under this agreement, the OECD committed to provide training to ISSSTE procurement officials and to submit an analytical report on issues relating to bid rigging and effective competitive procurement.

 

The ISSSTE report includes an analysis of ISSSTE’s practices, laws and regulations and provides several recommendations on how to enhance procurement procedures. The report was released on 14 November 2013 at a launch ceremony attended by OECD Secretary-General Angel Gurría (transcript of speech in Spanish).

 

Cover page for the ISSSTE Report


Government of the State of Mexico

The State of Mexico (Gobierno del Estado de México, GEM) is the largest of Mexico’s 31 states in terms of the annual volume of goods and services purchased. It spends approximately 23 percent of its annual budget on public procurement.

 

After his election in September 2011, Eruviel Avila Villegas (Governor of the State of Mexico) decided to seek the OECD’s assistance to improve the State’s procurement practices and to step up its fight against bid rigging. An agreement with the OECD and the CFC was signed in October 2011.

 

As a result of this agreement, the OECD drafted a report on Procurement Legislation, Regulations, and Practices in the State of Mexico with policy recommendations. This report was presented officially on 30 October 2012 during John Davies’ visit to Mexico to meet Governor Avila Villegas and other top level Mexican officials. 

 


Mexico’s Social Security Department

Mexico’s Social Security Department spends around 2.5 billion US dollars annually on pharmaceuticals and other goods and services. Stepping up their fight against bid rigging by companies tendering for government contracts, the Mexican Competition Authority and the Mexican Social Security Institute (IMSS) signed a co-operation agreement with the OECD in January 2011 to implement the OECD guidelines. Since then, the OECD and the Mexican Competition Authority have been working with the IMSS to improve rules and procedures, and to train procurement officers.

 

In January 2012, the OECD issued a report on IMSS’s procurement regulations and practices. The report also includes policy recommendations in key procurement areas such as market studies, co-ordination with other parts of government, and training activities:

  

Signing of the Memorandum of Understanding

Mexico-Fighting against bid rigging

(left/right) Angel Gurría, Secretary-General of the OCDE; Daniel Karam Toumeh, Director of the Mexican Institute of Social Security (IMSS) and Eduardo Pérez Motta, President of the Federal Competition Commission of Mexico (CFC) at the Signing Ceremony in Mexico City on 11 January 2011

>> Speech by Angel Gurría at the announcement of the OECD-CFC-IMSS co-operation

 


 

 

 

 

 

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