This report examines preventing, detecting and reporting bid rigging in public procurement in six countries: Austria, Bulgaria, Croatia, Cyprus, Greece and Romania. The report identifies ways to strengthen co-operation between competition authorities, procurement bodies and other public institutions, and provides guidance on advocacy initiatives. It analyses topics such as pro-competitive tender design, detection of bid-rigging cartels, leniency and whistleblowing mechanisms, and compliance programmes. The report aims to strengthen competition law enforcement in public procurement markets, thus safeguarding public resources.
Fighting Bid Rigging in Public Procurement in Austria, Bulgaria, Croatia, Cyprus, Greece and Romania
Improving Competition through Advocacy and Co-operation
Abstract
Executive summary
Public procurement plays a strategic role in government, representing one of its activities most vulnerable to integrity threats. Bid rigging undermines value for money in public spending, erodes trust in public institutions and reduces the quality of public service delivery.
Advocacy and institutional co‑operation can guard against bid rigging as a complement to law enforcement, raising awareness of cartel risks and enabling the detection of suspicious conduct. To that end, it can clarify how national legal frameworks regulate relevant topics such as leniency, whistleblowing, exclusion of bidders from procurement procedures (debarment) and compensation for victims of cartels. Co‑operation among different public sector authorities, especially procurement and competition authorities and other law enforcement bodies, can translate this awareness into effective action against bid rigging.
Governments and competition authorities can guide advocacy and inter-institutional co‑operation against bid rigging in a number of ways. These recommendations are grouped into two categories: 1) bid-rigging detection and prevention, which covers measures to raise awareness, strengthen institutional co‑operation and promote compliance to prevent collusion; and 2) effective redress against bid rigging, which focusses on judicial review, damages actions and bidder exclusion.
Preventing and detecting bid rigging
Engage the right actors: promotion of competition in public procurement starts with the recognition that competition authorities are not the only actors with a role in fighting bid rigging. Targeted outreach to public procurement officials is the first essential component of an effective advocacy strategy. Importantly, advocacy should extend to stakeholders outside the traditional competition or procurement ecosystems, including judges and non-competition enforcers (such as audit bodies, anti-corruption agencies and financial police). Overall, advocacy should be used to transmit knowledge, as well as to build networks among all actors involved in procurement.
Provide clear, practical guidance: public officials should be guided to recognise and report collusion. Advocacy should explain bid rigging and its costs, and what do to do when red flags are identified, including how to report them, whether to proceed with the procurement process, and if it is possible or advisable to exclude the suspected bidder(s) from the tender. Advocacy messaging should avoid generic or legalistic language. Instead, terms and content should be tailored to the operational reality of the audience.
Foster institutional co-operation among public authorities to prevent bid rigging and strengthen law enforcement: both formal co-operation agreements and informal relationships can be effective. Agreements provide a framework while working-level exchanges foster trust and continuity of co-operation.
Use international networks: Competition authorities should use fora such as the OECD, the International Competition Network and the European Competition Network, which provide peer learning opportunities and help avoid duplication of efforts in advocacy and enforcement.
Capitalise on existing resources: Advocacy and co-operation can be affected by a lack of resources and/or little budgetary or political support for outreach. Authorities may rely on individual projects, such as this one, and capitalise on them by repeating the generated materials and guidance for other audiences, cases and occasions.
Promote pro-competitive tender design: Procurement design choices can either reduce or, alternatively, exacerbate cartel risks. Pro-competitive tender design should remain a focal point of advocacy
Encourage corporate compliance: Companies should be encouraged to adopt effective compliance mechanisms and extend them to their suppliers, subcontractors and joint venture partners.
Clarify joint bidding and subcontracting risks: Authorities should offer guidance on how to assess the legality of joint bidding and subcontracting from a competition law perspective. This includes clarifying when co-operation is allowed (e.g. when bidders lack capacity to bid alone), and when it may raise competition concerns (e.g. when competitors team up without justification).
Strengthen messaging on leniency and whistleblowing: Companies and public officials must be made aware of available leniency and whistleblowing channels, and the related legal protections.
Secure access to procurement data: Competition authorities should advocate for access to procurement data. To that end, competition authorities should work with governments and procurement-oversight bodies to obtain the necessary access rights and, ideally, improve data collection, storage and usability.
Effective redress against bid rigging
Support judicial understanding of bid rigging and evidence: Judges play a key role in ensuring the effectiveness of competition law enforcement. Advocacy should therefore target the judiciary to strengthen their understanding of bid rigging. Peer-to-peer exchanges and seminars can explore key principles, case law, the assessment of evidence and the attribution of liability.
Promote awareness of damages claims: Advocacy can address and encourage seeking compensation by contracting authorities that have been victims of bid rigging. Competition authorities could also raise awareness of the main methodologies to quantify damages.
Bidders can be excluded from procurement procedures for bid rigging: Advocacy should stress that bidders can be debarred from procurement procedures for competition law infringements, under conditions provided in the relevant legal framework.
