Public sector procurement is a multi-billion dollar industry, making a vital contribution to our economy and the welfare of all Australians. This process relies heavily on vigorous competition to provide taxpayers with the best value for money. But competition does more than just deliver purchasers with the best possible deal. It encourages businesses to innovate, strive for efficiency and meet the needs of consumers. As such, the activities of public sector procurement professionals have an impact well beyond the sum of moneys spent. They help shape the very nature of the industries that they deal with and the dynamics of the wider economy.
Cartels threaten the effective operations of markets. Their activities are an insidious form of theft that siphons many millions of dollars a year from taxpayers and consumers. They create an illusion of competition while actually inflating prices. By conspiring to control markets, cartels protect and reward their inefficient members while penalising honest, innovative and well run companies.
Cartels have long found public sector procurement an attractive target, due to the large budgets and the unique nature of their business activities. The very factors that protect the integrity of public procurement also provide opportunities for those who seek to undermine competition.
The transparency and accountability of public spending gives cartels much of the information they need to organise their collusive arrangements. For this reason, the ACCC has developed this publication as a practical guide for government procurement professionals.
This publication is designed to give you the knowledge and the tools needed to help you detect possible collusion amongst suppliers. It gives examples of cartels that have been detected and the methods they used to deceive their customers. It gives specific guidance on when you may need to contact the ACCC to investigate suspicious behaviour.
Prevention, however, is better than cure. For this reason, this publication also gives practical advice on simple risk management strategies that, if adopted, will make your activities less prone to being targeted by a cartel. If potential cartelists are aware that you are vigilant, they will be far less likely to collude. For this reason, government procurement professionals are the first line of defence against the activities of cartels.