A Self-Crippled Regulator Unable to Protect Competition: The Contracting Authorities in the Spanish Public Procurement System

Abstract

On a functional basis, contracting authorities possess a twofold public-private nature. As State prominent parts, mostly Administrations, they are public bodies, holding prerogatives and acting as Regulators to ensure that the contracting activity complies with public contracting laws and procedures. But by appealing to the market to purchase goods and services, those authorities are also economic operators and act as any firm. It is in this very concept of clients or customers of an economic activity that they are bound up to fulfil Competition law requirements.The overlap of Regulation and Antitrust Law over a particular market usually poses the problem of choosing one or the other to tackle anticompetitive behaviours. This is a race for hooking the prey. Both are entitled to intervene, since they have among their objectives the protection of competition on the sectorial market, but operate at different levels (ex ante/ex post).The current Spanish Public Procurement law forsakes the contracting authorities to fight bid rigging and wipe colluders out of the procedure. This task is legally assigned to national and regional competition watchdogs.This paper aims at proposing feasible means for the contracting authority to tackle collusion alongside the tender process. These means should contribute to avoid bid rigging or, if failed, help the Competition agency to prove the anti competitive behaviour. A breakthrough in this way is the 2012 Proposal of Directive on Public Procurement, since it entitles the public body to expel those candidates with sound evidences of rigging before or during the contracting procedure. This formula seems to bring the solution back to Public Procurement, but favours errors Type I and Type II (false positives and negatives).Draft as of 09/June/2013 to be presented at the Conference PUBLIC PROCUREMENT: GLOBAL REVOLUTION VI, University of Nottingham-UK, 24-25/June/2013.Please do not quote without authors’ permissionComments welcome at antominho@hotmail.com; pvalcarcel@uvigo.es