In a highly unusual development that could help drain the cesspool of organised crime in the government tendering system, the Competition Authority has suspended a tender to supply and deliver building materials and small tools at the Hukuntsi Sub-District Council. A statement from the Authority says that the suspension comes in the wake of allegations of bid-rigging on the tender.
The statement doesn’t say what sort of bid-rigging occurred but there are four main types of bid rigging: bid suppression, complementary bidding, bid rotation and subcontracting. The most common is complementary bidding in which some of the companies submit phantom bids that they know the client will reject because the price is too high or the terms are unacceptable in order to create the appearance of legitimate bidding while ensuring that a pre-arranged bidder will win.
“After conducting preliminary inquiries, the Authority is of the view that there are evident contraventions of the Competition Act, in particular bid-rigging and other improprieties in the award of the tender. The Competition Authority is joined by its MoU partner, DCEC, in unearthing relevant information as the improprieties found fall within the DCEC mandate. As a consequence the execution of the tender has since been suspended pending further steps to be advised by the Competition Authority on the matter,” the Authority says in its statement.
As the primary enforcement agency for competition law and policy, the Authority’s mandate is to monitor, control and prohibit anti-competitive trade in the economy. In November 2011, it signed a memorandum of understanding with the Public Procurement and Asset Disposal Board (PPADB) and the Directorate on Corruption and Economic Crime (DCEC) to cooperate in dealing with fraud, deception, collusion and bid-rigging. Such cooperation takes the form of facilitating “timely sharing of relevant information to support the work of each party and to collectively contribute to the creation of good business environment that inspires investor.”
Speaking at the MoU’s launch in 2012, the PPADB Executive Chairperson, Bridget John, said that the aim of this collaboration was to make bid-rigging and collusive bidding more difficult for contractors. For her part, the DCEC Director, Rose Seretse said that her office had been getting tip-offs about public officials colluding with companies by leaking inside information about tenders. She also revealed that there had been an upsurge of reports where one person used several companies to bid for a tender.
