Bid rigging, or collusive tendering, occurs when there is a secret agreement among some or all of the bidders about who should win a bid.
This prevents open and effective competition and can lead to increased prices and reductions in choice, innovation and quality. As a result, purchasers are unlikely to achieve best value for money for their business, customers, and in some cases, taxpayers. Bid rigging is a form of cartel conduct, and is prohibited by the Commerce Act.
The Commission can take enforcement action against businesses and individuals who engage in bid rigging and the Courts can impose significant penalties against both businesses and individuals. Individuals can also be banned from running a company.
Businesses engaged in bidding should seek independent legal advice to ensure they are not at risk of breaching the Commerce Act.