CADE releases the checklist 'Bid rigging in government procurements: warning signs'

The Administrative Council for Economic Defense (CADE) released the checklist 'Bid rigging in government procurements: warning signs.' The document results from a project develop by CADE, in partnership with the Organization for Economic Co-operation and Development (OECD), aimed at assessing the regulatory framework related to government procurements in Brazil.

Bid rigging in government procurements concerns an agreement in which bidders define who will be the winning bidder, fix prices, divide the market, and avoid competing. When bid rigging occurs, the Government pays more for the products and services it purchases, wasting taxpayers money. Thus, purchasing agents should be able to assist CADE in fighting this practice.

CADE's checklist names a series of warning signs that can help identify whether bidding firms may be coordinating with each other. The warning signs can be observed in the bids submitted by bidders, such as documents with the same layout, identical writing or typing mistakes, and calculation errors.

Moreover, it is possible to identify suspicious behaviour of companies by observing price differences between similar bids in absolute or percentage terms, in addition to uniform and unjustified price increases submitted by bidders. Furthermore, warning signs are also found in bidding outcomes, for instance, when a small group of firms agree to take turns as winning bidders for the same government body.

Finally, the checklist advises that purchasing agents should report to CADE when they identify warning signs of bid rigging. Reports shall be made confidentially through the "Clique Denúncia" platform. For a step-by-step guide on how to report a violation, click here.

During the hearing on Wednesday (26 May), the President of CADE, Alexandre Barreto, pointed out that the agency is in contact with the Ministry of Economy in order to make the checklist available for all auctioneers on Comprasnet, the system website for Brazilian government procurements.

"This is yet another document that keeps CADE on the path of excellence it has been following in recent years," the President concluded.

Access the checklist 'Bid rigging in government procurements: warning signs'. Portuguese version only.