Getting Rid Of Bid Rigging In Public Procurement

Article by MM Sharma, Head Competition Law & Policy Practice, Vaish Associates, Advocates, New Delhi, India

The jurisprudence of CCI with respect of cartel and bid rigging is still evolving.

Public procurement in India constitutes about 30% of GDP, with total annual expenditure of around Rs 15-20 lakh crore, and that for the Union government alone in the range of Rs 2.5-3 lakh crore. This government activity is most vulnerable to corruption, not only between the suppliers and government staff but also within the suppliers themselves. The latter emerges in the form of cartels, i.e. bid rigging and collusive bidding—a form of cartelisation.

Whether an industry can become cartelised or not depends upon—apart from common factors such as market concentration or limited number of producers, high and inelastic demand, absence of substitute products—how great the incentives are for the firms in the industry to form a cartel and how sustainable the cartel is likely to