Colluding bidders for UK public contracts risk debarment in 2025

Alan Davis and Totis Kotsonis of Pinsent Masons were commenting after Sarah Cardell, chief executive of the Competition and Markets Authority (CMA), told the Financial Times that the regulator is aware of the “significant risk of bid-rigging” in procurement markets and is trialling the use of AI to identify companies engaging in the practice.

“We’ve now got the capability to be able to scan data at scale, bidding data at scale, to spot anomalies in that bidding data, and to identify areas of potential anti-competitive conduct,” Cardell said.

On 24 February, a new debarment regime will take effect under the Procurement Act 2023, under which prospective suppliers can be prohibited from being awarded public contracts. Committing a cartel offence is one of a number of mandatory grounds for exclusion from a public procurement under the new regime, while there are also discretionary grounds for exclusion. A corresponding list of ‘excluded’ or ‘excludable’ suppliers will be operated by the government – contracting authorities other than private utilities will be required to disregard any tender from an excluded supplier when making a competitive contract award.

The debarment regime provides for the notification of businesses of the intention to designate them as ‘excluded’ or ‘excludable’ suppliers and a standstill period during which suppliers can challenge those plans, as well as broader rights of appeal through the courts.

Cardell said the CMA believes the new regime has “real potential to drive billions of savings for the public purse” and to enhance “public sector productivity”, in support of the regulator’s own growth mission.

Davis, a competition law expert at Pinsent Masons, said: “The CMA has undertaken a considerable amount of competition law enforcement over the past 15 years in relation to bid-rigging in the UK construction sector, including public sector contracts. The CMA issued guidance as far back as 2014 as to why it is important for public sector procurers to be alert to bid-rigging and provided information on how to prevent, identify and address bid-rigging amongst public sector suppliers. In 2017, the CMA also announced a software tool which was freely available for procurement professionals to download and use, and which used algorithms to spot unusual bidder behaviour and pricing patterns which may indicate that bid-rigging has taken place.”

“The CMA’s use of AI to scan bidding data in order to identify potential anti-competitive conduct is an interesting further development and demonstrates the CMA’s increased use of sophisticated technology and data to underpin its competition law enforcement capabilities. The CMA’s specialist Data, Technology and Analytics (DaTA) unit now has over 80 people, including data scientists and data engineers, technologists, behavioural scientists, and digital forensics specialists. A further example of the CMA’s use of technology in relation to competition law enforcement is its online price monitoring tool used to detect suspicious activity, especially resale price maintenance, in the musical instruments retail sector,” he said.

Kotsonis, a procurement law expert at Pinsent Masons, said: “The new debarment list under the Procurement Act 2023 will ensure a joined-up and consistent approach across the public sector when excluding suppliers from public procurement procedures.”

“Where a supplier is excluded from one procurement procedure for meeting one of the mandatory or discretionary grounds for exclusion, the contracting authority must inform the appropriate authority. That authority may conduct its own investigation which may ultimately result in a supplier report being prepared by a government minister and the supplier being added to the debarment list. All other contracting authorities will then be able to see that this supplier is excluded or excludable without having to conduct their own investigations, saving a significant amount of time and, ultimately, public money,” he said.

Last month, the CMA opened an investigation into suspected bid-rigging in relation to a government fund for improving the condition of school buildings. At the time, it said it has “reason to suspect that several companies providing roofing and construction services – including building contractors and technical advisors – illegally colluded to rig bids to secure contracts funded through the government’s Condition Improvement Fund (CIF)”.

Juliette Enser, executive director of competition enforcement at the CMA, said: “This fund is incredibly important and ensures that essential building improvements can be made to schools throughout England, meaning students are learning in safe and suitable environments. While no assumptions should be made that competition law has been broken at this early stage, we will be investigating this issue thoroughly. We will now be making enquiries and assessing the evidence to see whether or not bid rigging has taken place – and what further action may be needed.”