Prevent collusive tendering to promote competition

The Competition Commission Brunei Darussalam (CCBD) through its Executive Secretariat at the Department of Competition and Consumer Affairs, continued to conduct the last two sessions of the workshop series on ‘Fighting Bid rigging in Public Procurement’ with the Ministry of Education and the Ministry of Development respectively, to raise awareness on the harmful effects of bid rigging, also known as collusive tender, as well as to educate public officials on how to detect and prevent bid-rigging in public tenders.

In line with the enforcement of the Competition Order in January this year, the workshop series is part of the CCBD advocacy initiative to promote a competition aware culture among public officials in conducting procurement activities. It was held in collaboration with procurement sections of the ministries to ensure a joined-up approach in combating bid rigging in public procurement towards safeguarding government’s budget.

Focussing on ‘Spot and Stop Bid Rigging’, the workshop explored concepts, best practices and preventive measures to stop bid rigging, as well as the potential of Electronic Tendering System or e-procurement system in substantially reducing risk of collusion in public procurement among bidders. Mohammad Reza, 2 Senior Legal Advisor to the Indonesia Competition Commission, who was seconded to the CCBD for two weeks, shared Indonesia’s experience on implementing e-procurement system, which includes e-tendering; e-catalogue; e-purchasing, in its effort to promote efficiency; transparency; accountability and fair business competition.

The workshop began with the introduction of Competition Order, which among others, prohibits anti-competitive agreements by two or more businesses to reduce competition in the market through agreements to fix price, divide market, limit supply or collude in tender (bid rigging). These agreements can be in the form of written or oral; expressed or implied; or a promise.

Senior Fellow to Melbourne Law School, Melbourne University Dr Hassan Qaqaya reminded the procurement officers that bid rigging in public procurement would not only be detrimental to the economy through the higher government costs and the inefficient allocation of resources it will impose, but it would also undermine confidence in government, which translates into a false public perception of procurement officers’ inefficiency.

Weighing the importance of “preventive better than cure” principle, the workshop deliberated extensively on how the tender documents can be designed to deter collusion in tender. Such measures include eliminating any unnecessary tender requirements or specifications that are not proportional with the goods or services required as it may exclude potential bidders. The workshop encouraged procurement officials to be open with bidding to allow more participants and alternative goods or services. This can be achieved by not specifying brand name and having reasonable submission time.

Inserting an anti-collusion tender clause was also emphasised as one of the tools to draw bidder’s attention on the consequences of engaging in bid rigging, which three include financial penalty and risk being blacklisted from participating in future tenders

Participants were also given case studies to discuss and apply the experts’ theoretical presentations to practical strategies on how to identify bid rigging and how procurement officials can better design the tender to close the possibility of collusion.

Participants were advised to report any suspicious bidding patterns that may warrant investigation to the CCBD with all supporting evidence. The executive secretariat of CCBD called for continuous cooperation to fight bid rigging towards achieving national agenda on prudent spending and value-for-money for public procurement.