Commerce Commission Raises Awareness on Bid Rigging

The Commerce Commission has produced guidelines to assist purchasers to recognise and combat bid rigging.

Bid rigging is a form of cartel conduct and, as such, is prohibited by the Commerce Act 1986. Ultimately, of course, it is the purchaser who decides who will win the contract, but competitors can collude to make it much more likely (in some cases virtually certain) that the bidder they select among themselves will be the successful bidder. This is particularly so in the current environment where lowest price tends to determine selection.

Thus, for example, a group of potential bidders might agree in advance that:

• all will submit significantly higher prices than the pre-selected successful bidder (in full knowledge of each other's pricing)