Bid rigging
Agreements among bidders to predetermine the winner of a public tender or procurement — bid rigging. Particularly affects companies participating in public procurement.
Linguistic warning signals
- mentions of 'who wins this time' or 'we take turns'
- coordination of bid amounts before the deadline
- agreements to submit cover bids (non-bona fide bids)
- discussions about splitting future contracts
Why it matters
Bid rigging is particularly sensitive when the buyer is the state: beyond the antitrust sanction, it can constitute fraud against public funds and trigger debarment from contracting with public agencies, affecting the company's entire revenue line in that segment. The OECD estimates these agreements raise public procurement prices by 20% to 30% compared to a genuinely competitive process — the damage isn't just reputational, it's a measurable overcharge to the state and, ultimately, to the public.
Relevant regulatory framework
- Chile — DL 211, Law 21.595
- Brazil — Lei 12.529/2011, Lei 14.133/2021
- Mexico — LFCE Art. 53
- OECD — Guidelines for Fighting Bid Rigging
Recommended action
- 1Suspend any bid submission until legal reviews the identified communication.
- 2Document the bid's price formation process independently and verifiably.
- 3Check whether the specific tender is already under scrutiny by the procurement authority.
- 4Train the sales team on what information must NOT be shared with competitors before the deadline.
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