27 September 2023

PS Agencies warned to avoid cartel collusions

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The Australian Competition and Consumer Commission (ACCC) has alerted public sector Agencies to take care when dealing with procurement processes that they don’t inadvertently break the law.

Chair of the ACCC, Rod Sims delivered the warning after a recent investigation by the Commission found Departmental processes had contemplated allowing cooperation by competing businesses on Government tenders.

“Public sector procurement is a multi-billion-dollar sector and, based on recent experiences, the ACCC is concerned that some Public Servants and businesses may not be sufficiently aware of the risk of breaching cartel laws during the procurement process,” Mr Sims said.

“Cartel conduct by businesses tendering in a public sector procurement process is illegal, just as such conduct is illegal in the context of a private sector tender,” he said.

Mr Sims said encouraging businesses to discuss their bids with each other, or to make agreements about who would bid for a particular tender, was likely to amount to cartel conduct, which was against the law.

“Cartel activities may start with a small encouragement or an innocent remark, but this can create an environment that enables, condones or facilitates collusive conduct between competing firms,” he said.

“Competition to supply Governments with goods and services is crucial in ensuring value for money for taxpayers.

“Cartel conduct in Government procurement is therefore not only against the law, but will often result in taxpayers paying considerably more for goods and services.”

Mr Sims urged procurement professionals in the public sector to familiarise themselves with the ACCC Guide, Cartels: deterrence & detection – a guide for government procurement professionals, but pointed out that it was also important for prospective bidders to be aware of their obligations and comply with the law.

“We encourage public sector procurement professionals to proactively review their procurement processes and identify and remedy any potentially anti-competitive elements in any procurement procedures, policies or guidelines,” he said.

In a separate matter, the ACCC has instituted proceedings in the Federal Court against a company and its director for involvement in an alleged attempt to rig a bid in connection with a tender by the National Gallery of Australia.

That matter remains before the court.

The 36-page ACCC Guide can be accessed at this PS News link.

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