Public procurement, competition and barriers to competition – Checklist for avoiding unlawful barriers to competition

The opinion states that public procurement can yield significant results. It refers to Nordic reports on public procurement, which state, among other things, that procurement in Sweden in 2006 amounted to around 15-18% of gross domestic product. It can also be considered that significant sums are at stake in this country with regard to tenders. It is therefore important to ensure that tenders are held to utilise the forces of competition when they are feasible and cost-effective.

The opinion also refers to examples where companies have attempted to influence tenders unlawfully. The opinion cites several domestic examples of this, particularly concerning the oil market, but also shipping, etc. Through such barriers to competition, the companies in question have negated the expectations of those running the tenders for lower prices, higher quality and increased innovation. International research shows that prices can increase by 10-30% and, in certain cases, by as much as 50% when competitors engage in illegal collusion. It is therefore crucial to curb illegal collusion and other anti-competitive practices in tendering.

The opinion calls on public authorities to monitor the implementation of competition law in procurement procedures. A special checklist has been prepared to help tenderers spot illegal collusion. Furthermore, public bodies are advised to use tenders whenever it is cost-effective and feasible. In the view of the Competition Authority, this is important for strengthening competition and improving the use of the funds spent on public procurement of goods, services and construction works. Local authorities are particularly encouraged to use tenders when purchasing goods and services.