Bid-rigging in public tenders costs the government huge sums of money in procurement of public tenders as in most cases it leads to delivery of shoddy work.
Duncan Morotsi, Director of Legal and Enforcement at Competition Authority (CA), explained on Wednesday that bid-rigging under section 25 of the CA Act is prohibited save for when a person calling for the bids is made aware of terms of agreement before the bids are submitted.
Bid-rigging is explained as horizontal agreement between enterprises whereby in response to a call, one of the parties agrees not to submit a bid or the parties to the agreement agree upon the price, terms and conditions of a bid to be submitted.
In most cases most companies collude resulting in others not submitting their bids to give bidding companies a good opportunity of winning such a tender. Elements of bid rigging, according to Morotsi, include bid withdrawal, bid suppression and bid rotation among others.
Other bidders go on the extent of sub-contracting upon winning tenders and reneging on the conditions of the tender. He observes that as a result of bid-rigging, taxpayers’ money ends up being used to pay for lower quality at lower price.
Companies found to be practising bid-rigging are liable to a fine of 10 percent of the initial turn-over of the whole project.
Also speaking at the media capacity building workshop on procedures of procurement, procurement specialist, Augustine Tema, explained that during procurement stages, the separation of powers and responsibilities are emphasised to avoid conflict of interest and a situation where one officer becomes a player and a referee at the same time.
To avoid collision between parties involved in the procurement process, he said there must be a clear distinction and separation of roles and responsibilities between evaluators and adjudicators.
He explained that the overall purpose of the public procurement system is to provide value for money by ensuring that public funds are spent in a transparent manner.
According to Tema, conflict of interest may exist when an officer is involved in activity or has a personal interest that might interfere with the whole decision making process. He said officers are required to declare their interest in any agenda discussed in a meeting or evaluation procedure and if necessary, excuse themselves from such committees.