Fighting Bid Rigging in Public Procurement in Colombia - 2014

Bid rigging involves groups of competing firms conspiring to raise prices or lower the quality of the goods or services offered to the government in public tenders. Although illegal, this practice is widely applied and continues to cost governments and taxpayers billions of dollars every year across the world.

The OECD Recommendation on Fighting Bid Rigging in Public Procurement calls for governments to assess their public procurement laws and practices at all levels of government in order to promote more effective procurement and reduce the risk of bid rigging in public tenders.

In 2013, Colombia partnered with the OECD to undergo a review of its procurement legislation and practices so as to check if they are in line with the 2012 Recommendation on Fighting Bid Rigging and the 1998 Recommendation on Effective Action Against Hard Core Cartels. The review also analysed the initiatives taken by the national competition authority (Superintendencia de Industria y Comercio - SIC) in combatting collusive practices in public procurement and in enhancing competition in public tenders. For this, the OECD relied heavily on the research of SIC staff that examined issues related to bid rigging and competition in public procurement in Colombia.

The resulting report identifies the features currently present in Colombia’s cartel enforcement and public procurement and sets forth advice and suggestions that can lead to closer compliance with the recommendations and guidelines, more effective procurement and a reduction in the incidence of bid rigging in Colombia. Key recommendations include:

increasing the use of public tenders, consolidated purchases and reverse auctions;
preparing detailed, useful market studies;
reducing disclosure of competitively sensitive procurement and bidding information;
increasing information sharing and communications among the SIC, the newly established National Public Procurement Agency (NPPA) and government purchasing officials; and
expanding training activities sponsored by the SIC and NPPA.

The report was launched on 11 February 2014 in Colombia at an event attended by representatives of the SIC, the Colombian Presidency, the National Public Procurement Agency, the National Agency for Infrastructure, academia and practitioners. Raising awareness among officials of the existence, risks and costs of collusive practices in public tenders can improve procurement effectiveness to the benefit of taxpayers. With this exercise, Colombia showed its commitment to improving its procurement practices.

Introduction

Competition in public procurement

The existing legal framework for public procurement in Colombia

Colombian compliance with the provisions on fighting bid rigging inthe 1998 Recommendation of the OECD Council concerning effective action against hard core cartels

Colombian compliance with the OECD 2012 Recommendation for fighting bid rigging in public procurement and the related guidelines

Advice and suggestions aimed at fighting bid rigging in procurement and improving Colombian procurement practices

Conclusions

Annexes

Recommendation of the Council concerning effective action against hard core cartels
OECD Recommendation for fighting bid rigging in public procurement and the related guidelines
Certificate of independent bid determination (Canada)
Certificate of independent price determination (United States, April 1985)
Recommendations addressed to the Government of Colombia
Recommendations addressed to the SIC
Recommendations addressed to the National Public Procurement Agency
Recommendations addressed to the Colombian government procurement groups