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UK Government Faces Growing Risk of Bid-Rigging in Public Contracts, CMA Warns

By  |  January 5, 2025

The UK government is increasingly vulnerable to bid-rigging by contractors, according to Sarah Cardell, the head of the Competition and Markets Authority (CMA). Cardell recently highlighted concerns regarding the potential for anti-competitive behavior in the country’s public procurement market, valued at £300 billion annually. As part of an effort to combat this issue, the CMA is testing a new artificial intelligence (AI)-driven tool designed to detect collusion in bidding processes.

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    Speaking with The Financial Times, Cardell explained that the trial program, which leverages AI to analyze large volumes of bidding data, is already showing promising results. The technology aims to identify irregularities in public contracts, enabling the CMA to detect potential bid-rigging and other forms of anti-competitive activity. “We know that procurement markets are at significant risk of bid-rigging,” she said, adding that the new system allows the agency to scan data at scale, making it easier to spot discrepancies and prevent fraudulent practices.

    The trial, currently in collaboration with one government department, has shown positive results thus far. The CMA’s new initiative comes amid rising concerns over the integrity of government procurement, particularly after recent investigations into suspicious activities. In December, the CMA launched an investigation into potential bid-rigging related to the Department for Education’s school improvement fund, which provides funding for the maintenance of educational buildings. The CMA suspects that some roofing and construction companies may have colluded to manipulate the bidding process.

    Related: UK Watchdog Investigates Suspected Bid-Rigging in School Building Projects

    This investigation follows a series of high-profile enforcement actions by the CMA. In 2023, the agency imposed fines totaling nearly £60 million on 10 construction firms found guilty of rigging bids for demolition and asbestos removal contracts. These cases reflect growing concerns over fairness and transparency in the awarding of public contracts.

    The UK’s procurement system has faced heightened scrutiny in recent years, particularly following the controversial contracts awarded during the Covid-19 pandemic. These deals raised alarms about conflicts of interest and the lack of transparency in the decision-making process. As public procurement represents roughly one-third of total government spending—around £329 billion in 2021-22—ensuring the integrity of these processes is a priority for the government and regulatory bodies.

    Per The Financial Times, Cardell’s remarks underscore the CMA’s commitment to addressing the risks posed by bid-rigging, which could undermine public trust in the procurement system. As the pilot program expands, the CMA aims to reduce the opportunities for fraud and improve oversight within this vital sector.

    Source: The Financial Times