The Competition and Consumer Protection Commission (CCPC) has published a guidance document for SMEs on consortium bidding for public contracts. The guide outlines how SMEs can comply with competition law when tendering on a joint basis.
The publication of the CCPC's guide follows the adoption of measures by both the Department of Expenditure and Reform (DPER) and the Office of Government Procurement (OGP) that seek to promote the participation of SMEs in tender processes. As of February 2015, the OGP is providing a tender advisory service under a pilot scheme through which SMEs can raise concerns about live tender processes.
DPER and OGP encourage SMEs to consider forming consortia where they are not of sufficient scale to tender independently. When SMEs form consortia, they often do so with other SMEs that in the normal course might be their competitors. For this reason, consortium members must exercise caution in their interactions and discussions, to avoid breaching competition law.
The CCPC guide provides an overview of competition law and how it applies to consortium bidding. It also provides practical guidance on forming a consortium and submitting a joint bid in compliance with competition law. Hypothetical case studies are included to illustrate use of the guidance in practice.
Whilst the guide is aimed at assisting bidders for public tender process, the competition law principles it outlines are also relevant for consortium bidders in private tender processes. Recent years have seen an increased use of tender processes in the private sector to generate competitive tension and drive down prices.
The key message of the CCPC guidance for SMEs is that consortium bids are permissible under competition law, provided that certain conditions are met. The guide outlines what these conditions are and how to comply with them. For example, competitor SMEs that are compiling a joint bid must only share the minimum amount of information necessary between consortium members. Outside of the tender process, consortium members must continue to compete against each other as vigorously as normal.
The CCPC guidance will undoubtedly be useful to SMEs forming consortia for bidding in tender procedures. It addresses some complex aspects of competition law in a clear and coherent style.
However, in order to be effective, government measures to promote the formation of SME consortia need to overcome the reluctance of some relatively conservative public purchasers to award contracts to consortia whose members do not have a track record of working together.
Consortium Bidding, How to comply with competition law when tendering as part of a consortium, A Guide for Small and Medium Enterprises (SMEs) is available on the CCPC's website
Further information on the OGP's tender advisory service for SMEs is available on the OGP's website