In the works, dig­i­tal sys­tem to de­tect car­tels in pub­lic pro­cure­ment

The Hindu Business Line - - NEWS - SWATHI MOOR­THY

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.

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