Regulating Bid-rigging Among Suppliers In Government Procurement

No matter in western countries where government procurement system has been highly developed or in China and other developing countries where government procurement system is in its early stage of development, it is a common topic how to ensure that government procurement can be conducted in an open fair and transparent manner, so as to get value for money and effectively play the policy role of government procurement system. In our country, government procurement meets procuring entities' needs by using procurement methods such as open tendering, invitation for bid, competitive negotiation, single source procurement and request for quotations; at the same time, it provides suppliers with huge business opportunities. Open tendering, as the main procurement method has been widely used because it secures maximum competition.With the expansion of the realm of government procurement and the extension of the size of government procurement, more and more suppliers are attracted by government procurement contracts, and some suppliers use improper means to seek to obtain government procurement contracts. To obtain government procurement contracts, some suppliers colluded with others in the tendering process, the most typical example is bid-rigging among suppliers made in the government procurement through tendering. In ordinary tendering process, if suppliers engage in bid-rigging, only other suppliers'lawful rights and interests will be harmed; however, in government procurement, once bid-rigging occurs, not only other honest suppliers but also the government providing budget and the taxpayers providing public funds will be harmed. Therefore, effectively regulating bid-rigging among suppliers in our public procurement is not only for regulating government procurement activities but also for protecting national interests and the interests of every citizen.However, because the relevant existing laws and regulations are not perfect and detailed enough, bid-rigging among suppliers in government procurement has not been effectively regulated. Moreover, currently there is little literature that discusses how to effectively regulate bid-rigging among suppliers in government procurement. Selecting proper supplier is crucial for ensuring the smooth operation of government procurement. The suppliers' active responses, especially their lawful participation, are needed for achieving the government procurement goals and ensuring the healthy development of government procurement. Therefore, it is necessary to further study how to effectively regulate bid-rigging among suppliers in government procurement.This paper, taking the existence of abundant bid-rigging among suppliers in government procurement in practice as the staring point, discusses how to effectively regulate bid-rigging among suppliers in government procurement. To this end, the author uses several research methods, such as theoretical analysis, the comparative research and the literature research methods. This paper is structured as follows:Part 1 is an introduction, explaining the research background and why the topic is chosen by the author, it also includes literature review and introduction to research methods and structure of the paper.Part 2 is an overview of bid-rigging in government procurement, in which the author first explain the government procurement parties and forms; and then define the government procurement of bid-rigging behavior, contains the meaning of bid-rigging, the basic concept and types of government procurement bid-rigging.Part 3 discusses the form and main harm of bid-rigging among suppliers in government procurement, in which the author first summarize five forms: bid-rotation; together-conspired bidding; division-bidding; accompany-bidding; bid-suppression. Then analysis the dangers, bid-rigging among suppliers destroys the fair and free market competition system, what is more, it encroaches the legal benefits of the main body of relevant market.Part 4 mainly analyzes the relevant existing laws and regulations. Author first point out almost all the relevant regulations about bid-rigging among suppliers, including:the government procurement law and the invitation and submission of bids law and related rules and regulations, the anti-unfair competition law and anti-monopoly law and related rules and regulations, the criminal law and the relevant judicial interpretations regulations. The systematic introduction and research is the author's first major contribution. Secondly gives an overall analysis on the problems, the definition and received sufficient policy, relevant regulations of a conflict between the lack of intensity, punishment, illegal regulatory division of confusion, this is the second major contribution.Part 5 is the suggestions. In order to effectively regulate bid-rigging among suppliers in government procurement, this part gives a research on international experience, analysis the United States and Japan's relevant regulations. Then profoundly discusses the way how to improve our country's regulation. Author suggests first perfect the definition of bid-rigging form, the exemption's amplitude and standard. Second solve the provisions' conflicts, take clear and integrate current overlapping regulations, promulgate the relevant actions. Third increase the penalties, from civil, administrative, criminal responsibility. Fourth clear the regulator by unify supervision instead of many departments' regulation or make deviation by promulgate new actions. These four main suggestions are the author's third major contribution.