Effective competition is very important for Government procurement and achieving good value for money.

Anti-competitive behaviour such as cartels (price fixing including “bid rigging”, market allocation and output restriction) harms competition and procurement. Cartels involve agreements among competitors and are illegal under the Commerce Act.

Most procurement occurs by tender or other bidding situations such as RFQs. Bid rigging or collusive tendering occurs when there is a secret cartel agreement among some or all of the competitors (bidders) about who should win the tender/bid. This prevents open and effective competition. In turn it can lead to inflated/increased prices and a reduction in choice, service levels, innovation and the quality of goods/services for the procurer.

Understanding Cartels

Take our quick 5-10 minute quiz to help test your current knowledge about cartels and how this relates to procurement.

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