Bid rigging
Public procurement toolbox, terminology, published by the Organisation for Economic Co-operation and Development (OECD), suggests bid rigging or collusive tendering: ‘occurs when businesses, that would otherwise be expected to compete, secretly conspire to raise prices or lower the quality of goods or services for purchasers who wish to acquire products or services through a bidding process.’
The glossary of statistical terms, published by OECD, defines bid rigging as: ‘…a particular form of collusive price-fixing behaviour by which firms coordinate their bids on procurement or project contracts.’
It states: ‘There are two common forms of bid rigging. In the first, firms agree to submit common bids, thus eliminating price competition. In the second, firms agree on which firm will be the lowest bidder and rotate in such a way that each firm wins an agreed upon number or value of contracts. Since most (but not all) contracts open to bidding involve governments, it is they who are most often the target of bid rigging. Bid rigging is one of the most widely prosecuted forms of collusion.’
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