At the end of 2020, the Bulgarian Commission for Protection of Competition (CPC) adopted new Guidelines for combatting bid rigging (i.e. collusive tendering) in public procurement, based on recent amendments to the Bulgarian Public Procurement Act, EU best practices and OECD rules and recommendations.
Bid rigging typically occurs when bidders agree to cooperate in competitions, such as taking turns as the designated successful bidder, agreeing to refrain from submitting a bid or through a similar action. A key principle of the Guidelines is that contracting authorities should lead the way in combatting bid rigging by organising and conducting procedures that make coordination between the participants as difficult as possible.
Current public procurement legislation requires contracting authorities to notify the CPC if there is reasonable suspicion for bid rigging during a tender. To assist contracting authorities, the CPC has ensured that the Guidelines include the main problems observed in tenders, the possible factors contributing to bid rigging, and a description of the circumstances that could indicate anti-competitive behaviour. It should be noted that the existence of one or more circumstances may only result in a suspicion of bid rigging, and may not constitute evidence of anti-competitive agreement between bidders.
Companies should be aware that bid rigging is a form of cartel activity, one of the gravest infringements of Bulgarian and EU competition laws. Bid rigging can lead to serious sanctions (e.g. a fine based on the percentage of an infringer's annual aggregate turnover up to 10%), fines for the individuals involved, reputational harm (e.g. negative media publicity) and damage claims from third parties (e.g. the affected bidders or the contracting authority). The CPC lists the detection of bid rigging as a top enforcement priority.
For more information on the new Guidelines and their potential impact on your business, contact your regular CMS source or local CMS experts: Nevena Radlova and Anna Tanova.
The article is co-authored by Kalina Krastanova.