What are the best international practices to avoid collusion in public procurement contracts?
Overview of collusion in public procurement contracts
International recommendations to avoid collusion
Public procurement constitutes a large part of OECD countries’ public spending. Due to the large sums of money involved, it can often fall victim to fraudulent activity such as collusive behaviour. Collusion between firms reduces fair competition and efficiency during the bidding process. It damages the economy by artificially inflating the prices paid for services and goods. International institutions such as the OECD, World Bank and the World Trade Organisation have made several recommendations for actions to be implemented to prevent and penalise collusive behaviour. These include measures against colluding firms such as: the tender design, transparency throughout the bid, a collaborative network of experts, and dissuasive sanctions such as debarment and monetary fines. These combined measures are expected to have a successful effect in tackling illegal appropriation of funds and markets.