The Romanian Competition Council (the “RCC”) recently published new guidelines on detecting and preventing anti-competitive practices in public procurement procedures (the “Guidelines”). The issuance of the Guidelines is further evidence of the RCC’s focus on anticompetitive behaviour in public procurement, an area the RCC views as particularly prone to misconduct.
The Guidelines provide valuable insight into what the RCC considers relevant signs of bid rigging, notable examples include:
- submission of closed bids (complimentary, curtesy and symbolic bids),
- withholding of bids by not participating in public tender or by withdrawing already submitted bids,
- submission of alternative bids whereby the successful bidder is agreed by rotation,
- market allocation practices (including allocation of clients, products and territories by bidding for individual contract lots);
- submission of a common bid by two companies, although the respective companies could have submitted individual offers;
- the conduct of certain bidders that generally participate together in public tenders and do not compete against each other in other public tenders;
- unchanged ranking of bidders throughout various phases of the bidding process;
- significant and unsubstantiated price difference between the successful bid and the other bids submitted in the public tender in comparison to the cost structure or other objective factors;
- similar mistakes or markings (such as the same stamp applied on envelopes) or identical costs estimates or uniform price increases in bids submitted by different bidders;
- justification of prices submitted by bidders by reference to “sector recommended prices” or “standard market prices”;
- use of similar terminology for justification of price increases;
- explanations provided by bidders that certain companies do not cover a particular segment of the market;
- explanations submitted by bidders indicating that information which is not public is already in the possession of competitors (details of the offer, the bidding prices) etc.
The Guidelines further analyse market traits (e.g. limited numbers of bidders, homogeneous products, market shares and costs symmetry, transparency of the market etc.) and features of the public authorities’ planning procedures (e.g. restrictive qualification and selection criteria, allowing communication between bidders etc) which may favour anticompetitive practices within public tenders.
Given the RCC’s increased interest in public tender procedures, as well as various high profile criminal investigations linked to tender procedures, the RCC is expected to continue its efforts in scrutinizing anti-competitive conduct in public tender procedures. In light of these circumstances, undertakings are advised to consider their bidding practices and policies, in light of the Guidelines and Romanian competition law generally, and adopt the RCC’s recommended measures for the purpose of mitigating potential risks of anti-competitive practices which may be triggered within the bidding process.