Cartels, deterrence and detection
Public sector procurement relies on vigorous competition to ensure that taxpayers and ratepayers get the best value for their money. A competitive market also encourages businesses to innovate, improve their efficiency and meet consumer needs.
The Australian Competition and Consumer Commission (ACCC) administers the Trade Practices Act 1974 (the TPA), which contains prohibitions against cartel conduct – anti competitive arrangements such as price fixing, bid rigging, market sharing and output restrictions.
Cartels create an illusion of competition but actually inflate prices. They protect and reward inefficiency and penalise honest, innovative and well run companies.
Due to the large budgets and unique nature of public sector procurement, cartels have long found this area an attractive target. The transparency and accountability of public spending, both vital to the integrity of the procurement process, can also provide cartels with much of the information they need to operate.
The ACCC has recently released Cartels, Deterrence and Detection – A guide for Government Procurement Officials to provide procurement professionals with knowledge and tools to help detect possible collusion among suppliers. The guide also gives advice on practical risk management strategies that could help to protect procurement activities against being targeted by a cartel.
Copies of the guide, and more information on cartel conduct and the TPA, are available from the ACCC’s website at www.accc.gov.au
Free copies of the guide can be obtained from the ACCC Infocentre on 1300 302 502.
