Single bidding in Europe is back, and you should be worried

In the run-up to the OECD Global Anti-Corruption & Integrity Forum on 30-31 March 2017, Jeroen Michels and Patrycja Breskvar of the OECD Directorate for Public Governance look at the danger of distorted competition in Europe today.

Let’s imagine for a moment, you are taking part in an online auction for a piece of designer furniture and you are the only bidder – it’s your lucky day, right? Now imagine you wanted to take part in the bidding, but somehow the auction was set up to undermine your participation. You have little chance now of bringing that Philippe Starck chair home. Frustrated? Of course!
Now consider this: single bidding and rigged procurement processes appear to be back in Europe.

The threat of distorted competition in Europe is emerging – according to Tenders Electronic Daily (TED), 30% of calls for tender across Europe received only one bid in 2015, double the amount from a decade ago. Considering that European governments’ procurement expenses accounted for around €1.9trl in 2015, the equivalent of one fifth of GDP, the risk of bid-rigging and collusion poses real economic implications. Incidents of hampered competition, such as the case of Britain’s Nuclear Decommissioning Authority, who bent the assessment of tender requirements in order to back up the Cavendish Fluor Partnership in a £7bn tender, raise serious concerns, as do the problematic practices observed in Slovenia over the 2015 Christmas period, whereby single-bids were the case in 50% of procurement contracts announced. As a recent Economist article accurately points out, the newest members to the EU appear to struggle the most with reduced competition in procurement. Croatia is the dubious winner here, with 43% of government contracts unchallenged in 2015, Hungary, Slovakia and Romania are just some of the close runners-up.

Just as you felt the blow of hampered competition in your attempt to buy a coveted Philippe Starck chair, society as a whole pays the ultimate price for collusive activity and rigged bids.  Not only does unfair competition restrict the access of buyers and suppliers which is a major hindrance on the path to a prosperous economy, it also results in poorer quality of goods and services obtained by the public sector. This undermines public trust in government operations and has negative effects on the whole policy-making process.

When addressing the issue of bid-rigging, resources such as the Recommendation on Fighting Bid Rigging in Public Procurement, the OECD Competition Assessment Toolkit, the OECD Recommendation on Public Integrity and the OECD Public Procurement Toolbox are resources to explore. Supporting the implementation of the OECD Recommendation on Public Procurement, the OECD Public Procurement Toolbox is an online knowledge sharing platform aimed at policy makers and public procurement practitioners and organises content by principles, country cases and assessment. A constantly evolving toolbox, its content can be modified according to the needs of the public procurement community.

Passionate about this issue? Then get out of your designer chair and come join the debate at the 2017 OECD Global Anti-Corruption & Integrity Forum on 30-31 March 2017 in Paris. This global multi-stakeholder event brings together public and private sectors, civil society and academia in order to present the latest insights on anti-corruption & integrity.

Useful links

  • Check out the Forum agenda for sessions that interest you.

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Rolf Alter, Director of the OECD Public Governance and Territorial Development Directorate @raltergov on OECD Insights Read the full article

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