CFTC warns against bid-rigging

The Competition and Fair Trading Commission (CFTC) has advised government officers involved in procurement against bid-rigging, where businesses collude to secure a contract for goods or services at a predetermined price.

Bid-rigging results in loss of public funds through purchasing of highly priced or substandard goods or services.

CFTC has since asked the officers to among others design tender processes to maximize participation of genuinely competing bidders and to effectively reduce communication among bidders by avoiding bringing them together  for a pre-bid meeting and ask them to disclose upfront if they intend to use subcontractors.

Speaking Tuesday at Mphatso Motel in Mzuzu, the commission’s director of mergers and acquisitions Richard Chiputula said the CFTC is interested in proper public procurement to improve efficiency.

“Bid-rigging or curtails are secretive conducts; we would, therefore like to have people who can inform us on what is happening on the ground. In this case, we know that the officers involved in procurement analyze the bids and can detect bid rigging,” he said.

Although the commission has not yet received any report on the same, Chiputula said CFTC suspects its presence; and that it is not reported because the officers might not be aware of how to deal with it.

During the meeting some participants observed that the regulator of public procurement, Office of the Director of Public Procurement (ODPP) has been involved in anti-competitive and unfair practices by issuing certificates to suppliers based on geographical areas of supply.

Responding to the queries, Chiputula said CFTC intervened in the matter as it was restricting competition.

“We moved in and took them to task. We believe that by now things have improved,” said Chiputula.

One of the participants, Alex Chambukira from Northern Region Water Board(NRWB) said the training was crucial as it will make the officers serve their institutions better and in a more transparent manner.

Among other common forms of bid rigging are cover bidding which might involve a competitor agreeing to submit a bid that is higher than the bid of the designated winner, bid suppression which occurs when one or more competitors agree to refrain from bidding or withdraw previously submitted bid.

Bid rigging is a criminal offence under Competition and Fair Trading Act.

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