Competition and corruption in public procurement - OECD Presentation

COMPETITION AND CORRUPTION IN PUBLIC PROCUREMENT

Alessandra Tonazzi

OECD Competition Division

Economic Importance

• Public procurement ≈ 13% of GDP and 30% of public spending , vital for delivering key services and policy goals

Integrity Risks

• Procurement involves complex interactions and discretion, creating opportunities for corruption and misconduct

Vulnerabilities in Crisis

• Emergency procurement accelerates timelines and reduces oversight, increasing risks of discretionary practices and weakened safeguards

Policy and Oversight Focus

• Ensuring procurement integrity is crucial for public trust, competition, efficiency, and delivering societal value

• Corruption weakens competitive pressure, reduces incentives to innovate, and increases prices paid by contracting authorities

Distorted Procurement Process

• Corruption influences all procurement stages, leading to biased specifications and unfair contract awards

Barriers and Market Concentration

• Corrupt practices raise entry barriers, deter honest firms, and increase market concentration

Corruption and Collusion Link

• Corruption shields cartels and enables collusion, weakening competitive pressure and governance

Fragmented Legal Frameworks

• Distinct laws and authorities govern corruption and competition, complicating enforcement efforts and posing ne bis in idem risks

Challenges in Evidence Sharing

• Evidence collection, due process considerations, and admissibility vary across criminal and competition laws

Detection Difficulties

• Corruption and collusion overlaps may reduce reporting incentives

Policy Trade-offs

• Balancing transparency and confidentiality is key to preventing corruption without enabling collusion

• Addressing corruption and competition risks requires collaboration across multiple authorities with distinct mandates and tools

Forms of Cooperation

• Cooperation includes information sharing, joint investigations, and formal agreements to strengthen enforcement Challenges to Cooperation

• Legal constraints pose significant barriers to effective cooperation

Whole-of-Government Approach

• Building trust, aligning incentives, and coordinating strategies are essential to enhance prevention and detection

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