Fair trade regulator Competition Commission of India has suggested that avoiding joint bids and sub-contracting of awarded works could help in preventing bid-rigging activities in public procurement system.
Competition Commission of India (CCI) has already dealt with various bid-rigging cases in public procurement and has been making efforts to fight the menace, which could result in losses to the exchequer.
The fair trade watchdog's Director General A K Chauhan has suggested various measures that would help in tackling rigging activities in public procurement.
DG is the investigating arm of the CCI. The regulator refers all cases where prima facie evidence of violation of competition norms has been found to the DG.
Touching upon the design of tender process, he has noted that "joint bids, subcontracting, repeated joint interaction, imposing reserve price," should be avoided.
Even identical mistakes in tender documents and different bids having similar hand writing and applications coming from same address might provide an inkling to possible rigging, according to a recent speech of the DG posted on CCI website.
A major activity in the country, public procurement was estimated to be worth about Rs 7 lakh crore, or about 30 per cent of the national GDP in financial year 2010-11.
Generally, bid rigging is referred to as a form of collusive price fixing behaviour where bids are obtained to earn and distribute higher profits.
Chauhan has said that maximising participation of bidders and removal of entry barriers, among others could promote transparent and efficient competitive bidding system.
The DG has investigated as many as 13 cases of bid rigging, including those related to LPG cylinders, captive explosives for mines, state lotteries, railways, defence goods and medical equipment.
Chauhan noted that dispatch of tender application from same address, identical bids of same value, odd bidding patterns, unexpected withdrawal of bidders and non-acceptance of the contract by the winning bidder, could be among the red flags that point towards rigging.
In tender documents, certain aspects that could provide a sign of rigging include "identical mistakes, adjustments, cost estimates or letters... Bids from different companies containing similar hand writing, type or font, stationery packaging, post mark, telephone number and addresses etc".
