German Federal Cartel Office publishes guidance document on identifying bid-rigging agreements

The German Federal Cartel Office (FCO) published a guidance document on how to uncover bid-rigging agreements on 19 August 2015. The document is addressed to contracting entities, but it is also interesting for undertakings organizing the procurement of goods or commercial services by tender procedures and for undertakings that participate in such procedures.

A bid-rigging is a form of collusion where an offer based on an unlawful agreement is placed in a tender process with the purpose to cause the organiser of such tender to accept a particular offer. Bid-rigging is a criminal offence and can lead to both criminal prosecution and administrative fines.

The guidance document published by the FCO contains a checklist with typical indicators which can give rise to the suspicion of bid-rigging agreements. It is based on the experience of the competition and prosecuting authorities, in particular in connection with the fire-fighting vehicles cartel and the rail cartel. According to the FCO, such indicators comprise, inter alia, the similarity of the design between bids, the existence of specific traceable bidding patterns as well as the placement of mere mock bids from certain bidders.

By publishing this guidance document, The FCO emphasizes that antitrust and prosecuting authorities are increasingly focusing on an effective prosecution of bid-rigging agreements. As a consequence, the information provided by the FCO is not only relevant for contracting entities and undertakings which might suffer harm from bid-rigging. It also shows that every company-specific compliance program should include the prevention of bid-rigging agreements as an integral component.