Anti-competitive conduct, such as a cartel, can be difficult to detect as it is generally carried out in secret. There are no simple indicators that a cartel exists, but there are warning signs that, if picked up, may lead to early detection of a cartel.

As a procurer you are in a good position to notice these warning signs and bring them to the attention of the Commission. Even the most conscientious purchaser can be unaware that a procurement has been affected by cartel conduct. Set out below are things to look out for when going through the procurement process.

Remember – the following factors are indicators of anti-competitive conduct that may call for further investigation. They are not in themselves evidence of such conduct. There may be legitimate business reasons for any of the following conduct. If you have suspicions, tell the Commission.

Look out for suspicious bidding patterns over time

  • a pattern of winning bidders revealed over time, for example, bids being won in a pattern such as A, B, C, A, B, C, or particular bidders always winning contracts of a particular type or size
  • a bidder that bids relatively high in some tenders but then relatively low in other similar tenders
  • a bidder that never wins but keeps on bidding
  • a bidder that rarely bids but always wins when it does so.

Look for suspicious bidding behaviour on a tender

  • likely bidders not submitting a bid
  • bids that are suddenly withdrawn, for example, on the entry of a new bidder
  • bids received at the same time, on the same paper and/or with the same post mark
  • bids received containing identical wording, particularly if it is unusual wording
  • bids containing the same errors, for example, misspelled words or mistakes in calculations
  • bids containing less detail than expected, or without required documentation
  • the same amendments being made to bids from different parties
  • last minute amendments made to bids without objective justification.

Look for suspicious pricing

  • suspiciously high individual bids without objective justification
  • all bids surprisingly high
  • identical pricing
  • discounts or rebates that appear similar or have poor justification
  • pricing that makes no sense to you
  • a new company entering the bidding at a much lower price – this may indicate that the new company’s bid is competitive and the existing companies have submitted elevated, non-competitive prices
  • bid pricing is noticeably different from previous bids with no objective justification, for example, a change in input costs. Keeping a database of previous tenders will help you identify this.

Look out for other warning signs

  • the successful bidder not taking the contract, or withdrawing before the contract is awarded, without objective justification
  • the successful bidder later subcontracting to another supplier, particularly one who had submitted a higher bid
  • indications that the competitors have communicated with each other, for example, a bidder having knowledge of a competitor’s bid (or previous bid), a bidder expressing surprise at being the lowest bidder, or a bidder having knowledge of matters that you have only communicated to another bidder and/or a bidder referring to ‘industry’ or ‘standard’ prices or practices.

What do you do if you suspect anti-competitive conduct?

DO
  • carefully question bidders about their bid and their pricing
  • note their replies and carefully record for future reference
  • check your records for any other suspicious signs
  • act normally, so as not to alert the bidders
  • continue with the tender process
  • report your suspicions to the Commission (details below)
DO NOT
  • accuse the bidders of illegal behaviour – if you are right, this may give them time to cover their tracks. If you are wrong, and your actions damage a bidder’s reputation, you may be accused of defamation
  • launch your own internal investigation without contacting the Commission. This might alert parties engaging in anti-competitive conduct that they may be exposed and give them time to destroy evidence
  • attempt to resolve it rather than reporting to the Commission