In the works, digital system to detect cartels in public procurement
As India moves towards centralised e-procurement route, the Competition Commission of India is working on a digital screen-based system to detect cartels in the public procurement system.
The regulator along with Government e-Marketplace — the centralised procurement agency — will work together for the system, which is still in the concept stage.
Sudhir Mital, Chairman, CCI, said in a recent roadshow organised by the regulator on public procurement, “We are in the process of creating a digital screen cartel detection system along the lines of Competition Market Authority in the UK. The tool will have the capability to scrutinise tenders and enable government agency to monitor any anti-competitive behaviour. For this initiative, we will be partnering with GeM,” he added. The digital screen-based system comes at a time when the country is moving towards centralised procurement system keeping in line with global systems. The competition watchdog will be getting best practices from all over the world and will engage in designing the system.
The software system looks into data elements including bidding price (as a ratio compared to reference price), number of participants, and competition method, and applies a formula that generates a potential bid-rigging score. If it is above a certain threshold, it then suggests the need to collect more information regarding the contract action.
The US has Bid Analysis and Management System for awarding contracts. Curbing cartelisation in public procurement process gains importance given that it accounts for almost 30 per cent of our GDP.
Leniency in penalties
The CCI has also amended its lesser penalty regulations to encourage more people to come forward with information regarding bid-rigging. A ‘lesser penalty’ applicant is someone who volunteers vital disclosure and relevant information, documents and evidence as may be required by the Commission in a case. He enjoys a priority status in the queue of applicants and is granted a reduction in penalty.
The leniency regime has seen some traction in the recent times, including a case of bidrigging in Pune Municipal Corporation tender.