The current practice of the Competition Council shows that cartels in procurements are the most serious and at the same time the most widespread distortion of the competition environment in Latvia. In order to combat this and successfully detect cartels, it is essential that the contracting authorities, which have the opportunity to be the first to notice suspicious discrepancies in the bids of tenderers, take active action to report possible breaches. Therefore, the Competition Council has developed a Signal List or recommendations for contracting authorities on how to recognize possible features of a cartel in procurements.
Over the past five years, the Competition Council has fined 49 companies for engaging in a cartel or implementing a cartel - in total, companies are fined more than 27 million euros. The majority or 80% of all infringements were related to bid-rigging in public procurements. Thus, bid-rigging are still the most frequently detected and equally one of the most serious infringements of competition law.
As a result, in the absence of fair competition, the price of goods and the service is made more expensive, so it is often compared to theft from society. Citizens therefore have the right to demand that public money be spent in the most efficient, transparent, accountable, and fair way.
In order to promote the efficient use of the public funds and, at the same time, the fight against cartels, the active participation of contracting authorities in the reporting of possible infringements is required. Thus, the Competition Council has prepared an informative material to educate contracting authorities about the principles of fair competition and prohibit agreements between bidders, as well as about preventive tools to be used on a day-to-day basis to reduce cartel risks, as well as advice and reporting opportunities.
Ieva Šmite, Head of the Cartel Department of the Competition Council: “Prevention does not mean waiting for something bad to happen but being ready to prevent and resolve situations so that this bad scenario never occurs. Unfortunately, practice shows that, apart from prevention, certain problems and their negative consequences are likely to be discussed later. Therefore, assessing the important role of contracting authorities and other partners of the institution, such as law enforcement agencies, in the detection and sometimes prevention of violations, the Competition Council has developed a daily, preventive tool - Signal List or recommendations on how to identify possible cartel features in procurements.”