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Bid rigging remains a thorn, CFTC says

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By Thabi Kamwangala:

The Competition and Fair Trading Commission (CFTC) has said bid rigging remains a challenge in the country, especially in public procurement.

This was said in Blantyre on Thursday on the sidelines of the international trade fair where the commission made a presentation on its mandate and strides made to counter the vice.

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Bid rigging, also referred to as collusive tendering, occurs when two or more competitors agree not to compete genuinely for tenders, allowing one of the cartel members to ‘win’ the tender.

The CFTC presentation focused on regulation of competition in procurement, forms of bid rigging, characteristics that support or promote bid rigging, detection of bid rigging, steps to take when bid rigging is detected, and how to reduce the risk of bid rigging.

CFTC Executive Director Apoche Itimu said efficient and competitive procurement processes are key to improved public service delivery, hence, the need to counter bid rigging at all levels.

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“Bid rigging results in loss of substantial public funds through purchase of highly priced and/or substandard goods and services; therefore there is need for cooperation in eliminating the malpractice,” Itimu said.

She said the CFTC is committed to ensure that both the procurement rules and procedures and the conduct by bidders should preserve competition.

Some common forms of rigging include cover bidding which occurs a competitor agrees to submit a bid that is higher than the bid of the designated winner or a bidder submits a bid that is known to be too high to be accepted, bid suppression which occurs when one or more competitors agree to refrain from bidding or withdraw previously submitted bid.

Bid rotation is also a form of rigging where bidders agree to take turns to submitting winning bids and lastly market allocation where competitors agree not to compete for certain customers or certain geographic areas.

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