Public procurements: CCP making headway in curbing collusive bidding

The Competition Commission of Pakistan (CCP) is making headway in curbing collusive bidding in public procurements as the Public Procurement Regulatory Authority (PPRA) has estimated $8 billion savings through revamped public procurement procedure.
In his presentation at the international conference here on Thursday, CCP Member Abdul Ghaffar said that as per PPRA, Pakistan spends an estimated 20-25 percent of its GDP on public procurement which comes around to around 55-60 billion US dollars equivalent to Rs 5,312 billion. The Public Procurement Regulatory Authority (PPRA) has estimated 8 billion US dollars in savings from improved public procurement processes. "There is a need to have exclusive federal as well as provincial institutions to regulate public procurements," CCP Member told the heads of the competition agencies.
Abdul Ghaffar further stated that reportedly the misuse of the public procurement in Pakistan as per Transparency International stood at around $4 billion and according to the PPRA the estimates come to around $8 billion. Keeping in view the huge impact on economy and thus consumer welfare, curbing collusive bidding in public procurement is a priority area for CCP under its roadmap. Furthermore, Public Procurement is highly susceptible to collusive bidding. Concrete steps have been taken by the CCP for capacity building of staff to investigate and prosecute the cases of collusive bidding, FBR Member said.
Abdul Ghaffar further stated that the in case of collusion between any employee or employees of Public Procurement Agencies (PPAs) and prospective bidders for a particular procurement, the case is liable to be prosecuted by public prosecution agencies eg NAB, FIA or provincial anti-corruption agencies.
He explained that the PPRA is an autonomous body endowed with the responsibility of prescribing regulations and procedures for public procurements by Federal Government owned public sector organisations with a view to improve governance, management, transparency, accountability and quality of public procurement with regard to goods, works and services. It is also endowed with the responsibility of monitoring procurement by public sector agencies/organisations and has been delegated necessary powers under the Public Procurement Regulatory Authority Ordinance 2002. Punjab and Sindh have adopted PPRA Rules, 2004 and formed Punjab Procurement Regulatory Authority and Sindh Public Procurement Regulatory Authority respectively. In Khyber Pakhtunkhawa procurement is regulated under NWFP Public Procurement of Goods, Works and Services Rules, 2008. In Balochistan and Gilgit Baltistan Procurement is managed by provincial departments under their Purchase Manuals.
Collusive Bidding Agreements can be very difficult to detect as they are negotiated in secret. Some inside information or search and inspection is usually required to establish such conspiracies. He said that the CCP is making efforts to build a liaison with PPRA to jointly pursue the objective of ensuring competitiveness in public procurements by exchange of information and sharing of resources. In this connection, the CCP will ensure close liaison with PPRA at Federal Level and Procurement Regulatory Authorities at Provincial level. There is a need for sharing and exchange of information with NAB, FIA, etc. Moreover, the capacity building of CCP's staff to investigate cases of collusive bidding.
Abdul Ghaffar further stated that the collusive bidding/bid rigging can take many forms. Some of the broad categories included 'Cover Bidding' and 'Bid Suppression'. In case of Cover Bidding, where one or more bidders submit bids which are highly unlikely to be accepted, to give an impression of competition bidding. However, Bid Suppression is in cases where one or more competitors who normally bid do not submit their bids so that a particular competitor's submission is accepted, he added.