Parastatals Trained to Detect and Prevent Bid-rigging

Parastatals officers involved in public procurement have been trained to detect and prevent bid rigging in tenders.  The training took place at a training workshop for parastatals organised by the Competition Authority this week.

Giving the keynote address at the workshop the Executive Director of the Public Procurement and Asset Disposal Board (PPADB) Ms Bridget John said bid- rigging is harmful to the economy, procuring entities and to the public who ultimately have to bear the cost as taxpayers and consumers.

“It is acknowledged that bid rigging agreements, as is the case with other corrupt practices can be very difficult to detect as they are typically negotiated under the cloak of secrecy. It is, therefore, necessary to constantly be looking for clues such as unusual bidding tendencies, pricing patterns, or something that the contractor says or does. We need market intelligence and to be on guard throughout the entire procurement process to understand market dynamics and players” John said.

Ms. John however cautioned that finding signs of possible bid-rigging does not necessarily mean that bid-rigging is occurring but simply shows that there may be a problem. “In this instance, the best thing for procurement officials to do is to contact the Competition Authority and have it investigate the signs detected” advised Ms. John.

Ms. John told participants that PPADB is deeply concerned by very high tender prices quoted by contractors for procurement that attract better prices and quality elsewhere,   the dominance of certain contractors in the local construction industry as well as frequent requests for cost increases during project execution as these create a fertile ground for bid rigging.

Participants were further informed that in its 2013-18 Strategic Plan PPADB has committed to reducing the use of less competitive procurement methods which create room for collusive bidding and other corrupt practices in favour of the default method of procurement which is open domestic bidding.  “Some may see competitive bidding as a lengthy and frustrating process but it is a necessary evil as there is value in fair competition” John said.

Earlier when explaining the objectives of the workshop, the Chief Executive of the Competition Authority Mr. Thula Kaira said procuring officers as the front-line designers and evaluators of tenders can only prevent bid-rigging if they know the clues or indicators that ought to raise their suspicion of bid-rigging.

“Detection of bid-rigging and reporting suspicions thereof is an important feed into institutions such as the Competition Authority. We cannot, on our own, succeed in dealing with bid-rigging unless there is a report” Kaira said.

He further informed the participants that the Organisation for Economic Cooperation and Development (OECD) has estimated that developing countries lose at least US$20 billion annually due to bid-rigging. “This is not a small amount, especially for a developing country that wants to accelerate development and/or maximise its returns from scarce resources. This is why your role is important as gate-keepers at the tender design and evaluation stages”.

The Directorate on Corruption and Economic Crime (DCEC) made a presentation to participants on how corruption and bid-rigging affect competition.  In his remarks DCEC Legal Officer Mr. Godknows Simon said bid-rigging and corruption are flipsides of a coin. He called for regular training for procurement staff on bid-rigging. “Periodically review the history of past tenders to try and discern suspicious patterns” Simon said.

The Competition Authority, DCEC and PPADB signed an MoU in 2011 to combat bid-rigging.