A few weeks ago, the European Commission published a notice setting out tools and guidance on fighting collusion in public procurement (the “Notice”). Collusion is addressed both in the Treaty on the Functioning of the European Union and the EU's public procurement framework, with regulation 199(c) of Malta's Public Procurement Regulations (S.L.601.03, implementing the EU public procurement Directive) empowering the Director of Contracts to blacklist an economic operator from participating in a procurement procedure when there are sufficiently plausible indications of collusion.
Collusion or bid-rigging between economic operators distorts competition to the detriment of companies seeking to develop their business (particularly small and medium enterprises) as well as those eager to develop innovative solutions to meet public sector needs, and is a major risk for efficient use of public funds. In fact, the Commission comments in its Notice that even one “single case of collusion in a multi-million award procedure will cost the European taxpayer millions of euros of excess payments to the detriment of efficient and accountable public spending”.
The Notice details the tools which the Commission envisages deploying in order to effectively assist Member States and their contracting authorities in countering the problem of collusion in public procurement, mainly related to support in the building of capacity for deterring, detecting and addressing collusion and fostering cooperation between competition authorities and central procurement authorities. The Commission calls on national authorities to inter alia take measures to train and incentivise staff to detect and address possible cases of collusion and focus on economic sectors considered to be most sensitive to collusion (due to a concentration of supply or demand (such as in low-scale award procedures) or important due to their economic size or role in society (such as construction, healthcare and the IT sector).
The Notice, however, also includes concise and user-friendly guidance for contracting authorities in i) designing award procedures in a way which deters collusion between economic operators; ii) detecting collusion when evaluating tenders; and iii) reacting to suspected collusion, including practical advice on how to apply the collusion-related exclusion ground in the procurement Directives. Amongst others, it dissects the (above-mentioned) notion of ‘sufficiently plausible indications'; considers the issue of affiliated companies participating in the same award procedure; briefly touches upon considerations related to joint bidding and subcontracting; and considers the self-cleaning measures which might be taken by economic operators.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.