The recent Recommendation of the OECD Council is part of the on-going work of the OECD to try to prevent collusion and bid-rigging in public procurement. The OECD defines bid-rigging as businesses, which would otherwise compete, secretly conspiring to raise prices or lower the quality of goods or services for purchasers who wish to acquire products or services through a bidding process. Bid-rigging is identified by the OECD as being particularly harmful if it affects public procurement as it takes resources from purchasers and taxpayers, it diminishes public confidence in the competitive process, and undermines the benefits of a competitive marketplace.

The OECD Competition Committee has already taken steps to try to prevent collusion in public procurement, for example, it published "Guidelines for Fighting Bid Rigging in Public Procurement" in 2009. The Guidelines include two checklists: a checklist for planning the public procurement process in order to reduce the risks of bid-rigging and a checklist for detecting bid-rigging in public procurement. The Guidelines are designed to assist procurement officials in identifying markets in which bid-rigging is more likely to occur so that special measures can be taken and in identifying suspicious behaviour by firms that may indicate that bid-rigging is taking place.

On the basis of a proposal of the Competition Committee in July 2009, the OECD Council made the recent Recommendation. In summary, the key recommendations are that OECD members:

  • assess the features of their public procurement laws and practices, including their impact on the likelihood of collusion between bidders, and design tenders to promote more effective competition and reduce the risk of bid-rigging while ensuring value for money;
  • ensure that officials running public procurement processes at all levels of government are trained to spot signs, suspicious behaviour and unusual bidding patterns which may indicate collusion, in order that these suspicious activities are better identified and investigated;
  • encourage public procurement officials at all levels of government to follow the Guidelines referred to above; and
  • develop tools to monitor the impact on competition of public procurement laws and regulations.

The Recommendation applies to all OECD countries, which includes the UK and Ireland. However, as it is only a recommendation it is not legally binding. It is not clear at this stage whether the UK Cabinet Office or the Irish National Procurement Service intend to publish guidance on the Recommendation.   

The full text of the Recommendation can be found by clicking here 

This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.