The Australian Competition and Consumer Commission’s warning comes with its observation that public sector procurement is a multi-billion-dollar sector which makes a vital contribution to the Australian economy and the welfare of Australian citizens and residents.

Based on recent experiences, however, the ACCC says it is concerned that some public servants and businesses may not be sufficiently aware of the risk of breaching cartel laws during the procurement process.

“Cartel conduct by businesses tendering in a public sector procurement process is illegal, just as such conduct is illegal in the context of a private sector tender,” ACCC Chair Rod Sims said.

“Encouraging businesses to discuss their bids with each other, or to make agreements about who will bid for a particular tender, is likely to amount to cartel conduct which is against the law.”

Sims says Cartel activities may start with a “small encouragement or an innocent remark, but this can create an environment that enables, condones or facilitates collusive conduct between competing firms”.

“Competition to supply governments with goods and services is crucial in ensuring value for money for taxpayers. Cartel conduct in government procurement is therefore not only against the law, but will often result in taxpayers paying considerably more for goods and services,” Sims said.

Sims encouraged procurement professionals in the public sector are ento familiarise themselves with an ACCC guide on cartel deterrence and detection.

“It is also important for prospective bidders to be aware of their obligations and comply with the law,” Sims said cautioned.

“We encourage public sector procurement professionals to proactively review their procurement processes and identify and remedy any potentially anti-competitive elements in any procurement procedures, policies or guidelines.”

 The ACCC’s statement issued on Monday noted that it cannot make further comment on the circumstances of the recent investigation.

In a separate matter, the ACCC previously instituted proceedings in the Federal Court against a company and its director for involvement in the alleged attempt to rig a bid in connection with a tender by the National Gallery of Australia. That matter remains before the Court.

By way of background to its statement on cartel conduct, the ACCC says that businesses providing goods and services under public sector procurement must not engage in conduct which is in breach of the competition provisions in the Competition and Consumer Act.

The ACCC says in 2019-20, there were 81,174 contracts for the Federal Government published on AusTender with a combined value of $53.9 billion.

Cartel behaviour, which involves businesses agreeing to act together instead of competing fairly, breaches the Competition and Consumer Act and cartel conduct can involve price fixing, bid rigging, market sharing, and controlling the amount of goods or services available.