Preventing collusive tendering in public markets – the case of framework agreements

Abstract

ABSTRACT Anti-competitive activities, like bid-rigging, undermine the main objectives of public procurement, such as value for money and efficiency in the procurement process. The magnitude of the problem in Europe is demonstrated by the frequency of bid-rigging cases. As it has already been underlined in the literature, bid-rigging may arise particularly in the context of framework agreements, which are constantly gaining ground in public procurement and are rather popular in Nothern Europe. In light of the framework agreements’ popularity in Europe and their vulnerability to collusion, this article identifies the elements of a framework agreement that make coordination feasible and bid-rigging attractive to the suppliers admitted to the framework agreement. This article also makes a number of suggestions for preventing the problem of collusion in framework agreements, with the aim of introducing new design features that will significantly reduce the scope for collusive outcomes within the procurement function.