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BID RIGGING OR CARTEL AGREEMENTS OF TENDERERS

October 2012 - EU & Competition. Legal Developments by Randa Havel Legal.

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by Kristýna Oberfalcerová, Attorney-at-Law, Randa Havel Legal

Bid rigging means the agreement between tenderers who intentionally damage the contracting authority by not submitting competitive offers, which leads to an increasing price compared to the price that would be achieved in the situation where candidates compete with each other. The aim is to achieve better conditions for the winner of the tender procedure. Bid rigging generally includes elements of agreements on price fixing and agreements on market sharing. These agreements have a direct negative impact on public budgets.

In the Czech Republic, in response to the urgent need to reduce public spending, the issue of bid rigging came to the fore both the OPC and the general public, because the agreements between tenderers can lead to increases in public spending by several tens of percents. Bid rigging could be penalized under the competition laws and under the criminal laws. It is one of the most serious forms of breach of the competition rules that can be qualified as "hard-core" cartel agreements.

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