The ACCC has recently warned public sector agencies of potential cartel behaviour from suppliers during procurement processes. Cartel conduct in government procurement processes is illegal and occurs when suppliers collude instead of competing fairly (e.g. agree to fix prices, rig bids or restrict outputs) to increase business profits.
The Organisation for Economic Co-operation and Development found that one of the key industry characteristics giving rise to cartel conduct in the procurement market are high entry barriers, which make it difficult for new or smaller firms to bid for contracts. While the Public Governance, Performance and Accountability Act 2013 (PGPA Act) and Commonwealth Procurement Rules (CPRs) include obligations that should prevent cartel behaviour, the ACCC states that ‘these same accountability and transparency requirements [may] provide colluders with the information necessary to establish, maintain and enforce a cartel’.
Being both a small and reasonably new consultancy firm in the market, Astryx is very familiar with the barriers to engagement by government agencies. This first-hand experience has influenced the procurement advice we provide to ensure our clients are accessing the best and brightest the market has to offer within the rules, while fostering and shaping a competitive and innovative supplier market to prevent any cartel-like behaviour and ultimately deliver value for money for our clients. Contact us if you’d like to find out more.
For more information on the ACCC report please see https://www.accc.gov.au/media-release/warning-on-cartel-conduct-risk-in-public-sector-tenders