Hong Kong competition watchdog releases anti-collusion tool

Out-Law News | 22 Dec 2017 | 12:05 pm |

Hong Kong's Competition Commission has published model contract clauses to help tendering companies guard against collusion between suppliers. 

The model clauses (11-page / 300-KB PDF) are intended to help procuring companies identify bid-rigging and other collusion during the tender process and in contracts for supply of goods or services.

A spokesperson for the Competition Commission said: “Procurement officers play a key role in preventing collusive conduct and safeguarding effective competition in the tender process. The model ‘Non-collusion clauses’ [provide] easily accessible references for procurers to strengthen defence against cartel conduct."

The model clauses provide wording for invitations to tender, for a non-collusive tendering certificate to be signed by tenderers and guidance on non-collusion clauses in contracts.

The use of such clauses are commonplace in the UK and other countries. There is also a strong drive towards helping procurers detect collusion amongst suppliers and the UK's competition authority, the Competition and Markets Authority (CMA), has launched a software tool for procurers which uses algorithms to spot unusual bidder behaviour and pricing patterns which may indicate that bid-rigging has taken place.

"Bid-rigging in the public sector can cost taxpayers many millions of pounds," said CMA senior director of advocacy John Kirkpatrick. "Companies disguise their bids so that they look like they’re genuinely competing, when in fact they are colluding with each other to take advantage of the public purse."