A critical investigation of effective enforcement of public procurement law in relation to bid rigging in the Czech Republic – does it really work?

(1)

1

Master thesis

A critical investigation of effective enforcement of public procurement law in

relation to bid rigging in the Czech Republic – does it really work?

Name: Karolína Horská

E-mail:

karolina.horska@student.uva.nl

Student number: 12347108

Master track: European Competition Law and Regulation

Name of supervisor: dr. Kati Cseres

Date of submission: 26/07/2019

Word count: 11 923

Abstract

: Bid rigging is a currently highly discussed issue in the field of public procurement law, which restricts correct functioning of the competitive market and undermines trust in public administration. In the Czech Republic in particular, the Office for the Protection of Competition considers the fight against bid rigging in public procurement its number one priority. This is because in the Czech Republic annually large amounts of public funds are dedicated to public procurement award procedures and thus any distortions have significant impact on the market. The effective enforcement of public procurement law provides the certainty of a healthy competitive environment for Czech undertakings and guarantees adequate use of taxpayers’ money. That is why its existence is essential and this essay comments on its existence in the Czech legal framework, its efficiency, the activity of the Office for the Protection of Competition and possible impeding factors.

(2)

2

CONTENT

INTRODUCTION ... 3

Chapter 1. PUBLIC PROCUREMENT AND THE BID RIGGING ISSUE ... 5

1.1 The link between competition law and effective enforcement of public procurement ... 5

1.2 Big rigging as a burning problem of public procurement ... 6

1.3 Types of bid rigging ... 7

1.4 Market conditions facilitating occurrence of bid rigging ... 9

Chapter 2. PUBLIC PROCUREMENT AND BID RIGGIN UNDER EU LAW ... 11

2.1 EU legal framework for public procurement ... 11

2.2 EU legal framework for bid rigging ... 13

2.3 Landmark cases of bid rigging in EU law and their implications ... 14

Chapter 3. PUBLIC PROCUREMENT AND BID RIGGING UNDER CZECH LAW ... 16

3.1 Legal framework for public procurement law in the Czech Republic ... 16

3.2 Inclusion of bid rigging in the Czech legal provisions ... 17

3.3 Bid rigging in Czech criminal law ... 18

3.4 Delineation of the term bid rigging in the Czech legal sphere ... 19

3.5 First case of bid rigging in the Czech Republic ... 20

Chapter 4. EFFECTIVE ENFORCEMENT IN THE CZECH REPUBLIC ... 21

4.1 The role of the Office for the Protection of Competition ... 21 4.2 The approach of to detection of bid rigging ... 23 4.3 Leniency program and settlement procedure ... 24 4.4 Corruption as a factor impeding effective enforcement of public procurement law ... 26 4.5 Recent relevant cases of bid rigging in the Czech Republic ... 28 CONCLUSION ... 31

(3)

3

INTRODUCTION

At the 12th annual St. Martin’s Conference organized by the Czech Office for the Protection of Competition in November 2018, bid rigging was highlighted as one of the burning problems of the Czech competition law, happening on a regular basis in public contract award procedures.1 In this phenomenon, parties agree to coordinate bids in a tender distorting its correct and fair functioning and negatively impacting the whole market. Even though there is yet to be created a specific legislation on this issue of both EU and Czech national level, the issue of bid rigging is receiving a great deal of attention2 and is dealt with by the respective competition authorities with no mercy. This is because public procurement involves large amount of public funds and its restriction causes inefficient use of tax-payers’ money and leads to distrust towards public administration. It is thus vital to ensure effective enforcement of public procurement law and provide a platform for fighting the anti-competitive practice of bid rigging on both EU and national levels. This thesis focuses on one particular European Union Member State, the Czech Republic, and tries to critically answer the question whether

there is an effective enforcement of public procurement law in relation to bid rigging and whether it actually works.

Regarding methodology, the aim of this essay is to describe and analyse the issue of public procurement and bid rigging in the Czech Republic. Certain comparative aspects are added too, when comparing the Czech legal system with the one of the European Union. The method is thus doctrinal-positivistic. The structure of the essay is built on the existing legislation and in both the EU and the Czech Republic, while illustrating the practice on

1_{V. Staňková, Svatomartinské konferenční finále o Bid rigging, Ekonomický deník (2018). Available at:} http://ekonomicky-denik.cz/svatomartinske-konferencni-finale-bid-rigging/.

2_{A. Sánchez Graells, Public Procurement: A 2014 Updated Overview of EU and National Case Law,} e-Competitions: National Competition Laws Bulletin No. 40647 (2011), p.3. Available at: https://poseidon01.ssrn.com/delivery.php?ID=66708500307300307812112209102211610700108302704300102 006712311811810611702707508910505810206012110200911506710808811106609211006000503501501506 510203111112709809503401900309911200710911411608800207301402002006708606910410910201211606 8089011111090088&EXT=pdf.

(4)

4

landmark and recent cases, and to further comment on the enforcement of this legislation through the Office for the Protection of Competition. To support this research, sources such as the website of the Office, Transparency International reports, OECD reports and legal journals are used.

As part of the analysis, in Chapter 1 this essay first focuses on public procurement and the bid rigging issue in general and explains its extreme importance for the correct functioning of the internal market. It further introduces the problem of bid rigging and its effects on competition. It argues that bid rigging disrupts fair competitive process as the undertakings involved agree on a common bid strategy and that this happens often as the area of public procurement is prone to collusion. In addition, Chapter 1 also mentions the types of bid rigging that can occur and market conditions that facilitate its creation, which are aspects essential to understand the basis of this collusive practice.

Chapter 2 considers the European Union legal framework, which is necessary to touch upon to comprehend the Czech legal framework which follows later. The Chapter talks about legislation for public procurement, which gives basis to legislations on Member State level. It also tries to locate bid rigging within the EU legal order, as it is not explicitly mentioned in any provision, but rather widely interpreted under Article 101 TFEU. Lastly, the landmark cases of bid rigging and their implications are explained.

Chapter 3 finally gives attention to Czech law, specifically to legal framework for public procurement, which stems directly from the respective EU law mentioned before. It further sets the problematic practice of bid rigging into the Czech legal order and to find a delineation of this term, because here it also lacks any clear definition. Since in the Czech Republic, bid rigging can also fall under criminal law, this specific feature is discussed as well. In the end the Chapter introduces the first case of bid rigging caught and fined in the territory of the country, which gave basis for next investigations by the Office.

Chapter 4 deals with effective enforcement in the Czech Republic by first looking at the role of the Office for the Protection of Competition and its powers and tasks. It debates the approach the Office uses to detect bid rigging, for example the leniency program, and the ways it tries to facilitate the administrative proceedings, especially under the settlement procedure. Additionally, corruption is presented as the most imminent problem endangering the effective enforcement of public procurement law as it helps support bid rigging. The strict policy of the Office and its goal to tackle this anti-competitive practice is, at the end, illustrated on recent cases.

(5)

5

The conclusion then talks about the findings of the thesis and concludes whether there

is an effective enforcement of public procurement law in relation to bid rigging in the Czech Republic and whether it really works.

Chapter 1. PUBLIC PROCUREMENT AND THE BID RIGGING ISSUE

1.1 The link between competition law and effective enforcement of public procurement

Public procurement and competition law are both particularly important fields of public policy and legislation for the European Union (henceforth referred to as the EU). They played an essential role in the creation of the internal market and their proper implementation and enforcement is vital for maintaining and advancing European economic integration. Public procurement as well as competition law are of the utmost relevance for organisations active in the EU since they serve as two elementary building blocks of market regulation. They are moreover primarily entrusted with guaranteeing the existence of a level playing field within the internal market and the effectiveness of the fundamental freedoms enshrined in the Treaty on the Functioning of the European Union (henceforth referred to as the TFEU).3

The effectiveness of public procurement and its ability to contribute to the proper and most efficient carrying on of public interest obligations is conditional upon the existence of competition in two different ways. Firstly, public procurement rules protect and promote competition with the objective to gain value for money and to provide legitimacy to purchasing decisions. In this regard competition is a tool for public purchasers to benefit from a competitive attitude among bidders and for fighting corruption or any other suspicious practices.4 Secondly and subsequently, to achieve this value for money and be effective in the public sector, public procurement always needs to occur in a competitive market. In its Green Paper on the modernisation of EU public procurement policy: Towards a more efficient European Procurement Market5 the Commission emphasized that “it is vital to generate the strongest possible competition for public contracts awarded in the internal market” and

3_{A. Sánchez Graells, Public Procurement and the EU Competition Rules, Hart Publishing (2015), p.3. Available} at:

https://books.google.nl/books?hl=en&lr=&id=hnW_CQAAQBAJ&oi=fnd&pg=PP1&dq=public+procurement+c ompetition+law&ots=eM7ZqbdGY0&sig=0jdEdZ7gR47tQTOpkFNpi86t7nU#v=onepage&q&f=false.

4_{A. Sánchez Graells, Public Procurement and the EU Competition Rules, Hart Publishing (2015), p.11.} Available at:

5_{European Commission, Green Paper on the modernisation of EU public procurement policy: Towards a more}

efficient European Procurement Market (2011), p. 4. Available at: https://publications.europa.eu/en/publication-detail/-/publication/04a30c4a-e533-41ec-a039-231f1aa39645/language-en.

(6)

6

“bidders must be given the opportunity to compete on a level playing field and distortions of competition must be avoided”.

The issue at hand is that public procurement regulations can often create distortions of competitive market dynamics6 and subsequently cause that the public buyer does not receive the best value. Public procurement regulations tend to establish market-like mechanisms that can result in dividing the market into isolated highly regulated sub-markets, which can distort or restrict competition. For that reason it is highly important that public procurements rules are pro-competitive and in non-restrictive towards competition as that is the only way to maintain public procurement efficiency within the internal market.7 This essay will therefore work with the assumption that competition is a general principle of EU law that must be taken into account when creating any economic regulations.8_{Hence, healthy competition in the} market is a prerequisite for the correct functioning and enforcement of public procurement on both EU and Member State level, bringing benefits to the economy and to society as a whole.9

1.2 Big rigging as a burning problem of public procurement

One of the most serious collusive practices that endanger effective implementation and enforcement of public procurement is bid rigging. According to the Organisation for Economic Co-operation and Development (henceforth referred to as OECD) Guidelines for Fighting Bid Rigging in Public Procurement, bid rigging occurs “when businesses, which would be normally expected to compete, secretly conspire to raise prices or lower the quality of goods or services for purchasers who wish to acquire products or services through a bidding process.”10The priority in public procurement is to strive for quality products or services with low prices achieved in a fair competitive process.

Bid rigging disrupts this process as the undertakings involved agree on a common bid participation strategy. The further consequences are that it removes resources from purchasers and taxpayers, diminishes public confidence in competition law and authorities, and

6_{D.F. Kettl, Sharing Power: Public Governance and Private Markets, Brookings Institution (1993), p. 31.} Available at: https://onlinelibrary.wiley.com/doi/abs/10.1002/pam.4050130413.

7_{A. Sánchez Graells, Public Procurement and the EU Competition Rules, Hart Publishing (2015), p.13.} Available at:

8_{O. Odudu, The Boundaries of EC Competition Law: The Scope of Article 81, Oxford University Press (2006),} p.9. Available at: https://global.oup.com/academic/product/the-boundaries-of-ec-competition-law-9780199278169?cc=nl&lang=en&.

9_{C. Munro, Competition law and public procurement: two sides of the same coin?, 6 Public Procurement Law} Review (2006), p. 352-361.

10_{Organisation for Economic Cooperation and Development, Guidelines for Fighting Bid Rigging in Public}

Procurement: Helping governments to obtain best value for money (2009), p. 1. Available at:

(7)

7

undermines the benefits of a competitive marketplace.11 In addition, bid rigging increases the cost of public contracting by 20-30%.12Such disruptive agreements, especially in a long-term perspective, can use extremely complex systems and sophisticated methods of mutual cooperation and distribution of profits. Whole regions may be affected by the networks of these collusive agreements which can last decades.

It ought to be stated that public procurement is, by its nature, very prone to collusion between undertakings involved. As the OECD mentions in its Policy Brief, “the formal rules governing public procurement can make communication among rival companies easier, promoting collusion among bidders. While collusion can emerge in both procurement and ordinary markets, procurement regulations may facilitate collusive arrangements.”13 It further notes that while private purchasers can choose their buying strategies flexibly, the need for transparency in the public sector is essential. Moreover, public procurements are limited by legislation, heavy administrative regulations and procedures to prevent any abuse.14 It is the transparency that can result in collusion as many details of the bidding process, such as the identity of the bidders or the terms and conditions of the bids in question, are revealed and competitors can thus notice deviations from bid rigging agreements, punish those firms and better coordinate future undertakings involved.15

For these particular reasons, bid rigging presents a pressing issue in the area of public procurement and needs to be tackled effectively by the respective competition authorities.

1.3 Types of bid rigging

Bid rigging appears in many forms, all of which significantly distort competition and lower the chances of achieving the goal of a fair public procurement process. It often involves mechanisms to apportion and distribute the additional profits obtained as a result of the higher final contracted price among the colluding parties;16 however, long-term bid rigging

11_Ibid.

12_{R.D. Anderson and W.F. Kovacic, Competition policy and international trade liberalisation: essential}

complements to ensure good performance in public procurement markets, 2 Public Procurement Law Review 67

(2009), p. 71. Available at: https://www.ftc.gov/sites/default/files/documents/public_statements/competition-

policy-and-international-trade-liberalisation-essential-complements-ensure-good.anderson/2009procurementmkts.pdf.

13_{Organisation for Economic Cooperation and Development, Policy Brief: Fighting Cartels in Public}

Procurement (October 2008), p. 2. Available at: https://www.oecd.org/daf/competition/cartels/41505296.pdf. 14_Ibid.

15_Ibid.

(8)

8

agreements can take form of much more sophisticated structures of managing the illegally obtained gains.

The most frequent form a bid rigging collusion can take is cover bidding, which on the surface appears to be a fair competitive agreement. As part of cover bidding all parties to the agreement submit bids but agree in advance which of them will submit the lowest bid and become the winner, alternatively the parties except the designated winner submit bids that are entirely out of range and unrealistically high to be accepted. Moreover, the participants may also submit bids containing terms and conditions that are evidently unacceptable to the procurement authorities.17The Commission also recognized “supporting bids” in case COMP/F/38.899 Gas Insulated Switchgear, in which “in order to ensure that contracts were actually awarded to the company having obtained the allocation within the cartel joint committee meetings, the so-called ‘allottee’ could request a supporting bid from a cartel member from another group,…, in order to leave an impression of genuine competition.”18 It is thus clear that undertakings create new ways of perpetrating bid rigging and the Commission, as the respective authority on the European level, endeavours to continue to uncover these new ways of undermining healthy competition in public procurement.

Another form of bid rigging is bid suppression, as part of which the colluding parties agree not to bid at all or, in case they have already submitted it, to withdraw it in favour of the designated winner.19Furthermore, bid rotation represents another anti-competitive practice in public procurements, where conspiring firms continue bidding but agree in advance to rotate the designated winner with the goal to ultimately allocate the same sum of money to each of them. The colluding parties can also agree to allocate according to their revenue or market share figures,20 which, for example, happened in the Elevators and Escalators case.21

17_{A. Blume Huttenlauch, R.M. Stein, Important Guidance on the Application of Public Procurement Law: the}

OECD’s Recommendation of Fighting Bid Rigging in Public Procurement, KNect365 (2016). Available at:

https://knect365.com/complaw-blog/article/2c55b0f8-e5d0-4656-a3d1-f38d7bc8af05/important-guidance-on- the-application-of-public-procurement-law-the-oecds-recommendation-on-fighting-bid-rigging-in-public-procurement.

18_{European Commission, Commission Decision relating to a proceeding under Article 81 of the EC Treaty and}

Article 53 of the EEA Agreements, Case COMP/F/38:899 GAS INSULATED SWITCHGEAR (2007), para 153.

Available at: http://ec.europa.eu/competition/antitrust/cases/dec_docs/38899/38899_1030_10.pdf.

https://www.oecd.org/competition/cartels/42851044.pdf.

21_{Commission Decision of 21 February 2007, substantially upheld on appeal Cases T-141/07 etc General}

(9)

9

Lastly, bid rigging can also occur in form of market allocation, where the undertakings involved divide the market and agree not to compete either in a specified geographic area or in a given group of customers. Competing firms may, for instance, allocate a particular group of customers to various companies, so that competitors will not bid, or alternatively will only submit a cover bid, on contracts offered by a certain class of potential customers which are given exclusively to one chosen firm and vice versa.22 This is what occurred in the already mentioned case Gas Insulated Switchgear, where “the principal aspects of the complex of agreements and concerted practices which can be characterised as restrictions of competition”23 were “allocation of quotas and maintenance of the respective market shares” 24 and “allocation of individual projects to designated producers and manipulation of the bidding procedure for those projects (bid rigging) in order to ensure that the assigned producers were awarded the contract in question”.25

These forms of bid rigging are not mutually exclusive.26Rather, they are often used in conjunction with another to create a more complex anti-competitive agreement, for example, cover bidding can be used alongside bid-rotation.27 Nevertheless, it must also be stated that the more complex the bid rigging scheme, the more obvious the unusual behaviour of the undertakings and the easier it is for authorities to detect it.

1.4 Market conditions facilitating occurrence of bid rigging

Collusion among undertakings occurs in almost all economic sectors of which public procurement is part. Nevertheless, certain markets are particularly vulnerable to bid rigging and their particular characteristics can facilitate the creation of this illicit practice. OECD gives a clear overview of factors that help support collusion in its Guidelines for Fighting Bid Rigging in Public Procurement,28 however, it is necessary to mention that this list is not

23_{European Commission, Commission Decision relating to a proceeding under Article 81 of the EC Treaty and}

Article 53 of the EEA Agreements, Case COMP/F/38:899 GAS INSULATED SWITCHGEAR (2007), para 302.

Available at: http://ec.europa.eu/competition/antitrust/cases/dec_docs/38899/38899_1030_10.pdf. 24_{Ibid, para. 302(b).}

25_{Ibid, para. 302(c).}

Procurement: Helping governments to obtain best value for money (2009), p. 1-2. Available at:

27_{A. Schelleová, Bid rigging, nebo-li zakázaná dohoda mezi uchazeči o veřejnou zakázku, Antitrust (2015), p.} 97. Available at:

http://www.achourpartners.com/upload/publikace/58b79d7d94df4.pdf.

Procurement: Helping governments to obtain best value for money (2009). Available at:

(10)

10

exhaustive. There might be more factors influencing the chances of bid rigging agreements and similarly, bid rigging can occur even without these factors present in the market in question.

According to the OECD it is usually markets with low numbers of undertakings that are especially vulnerable to the practice of bid rigging.29 The reason for this is because it is easier to coordinate bidding procedures where there is a small number of suppliers. Such situations can in particular occur in markets with highly specialised technology, rare goods and specific engineering services or with goods restricted by patents and intellectual property.30 A closely connected factor is low or zero market entry, which may be caused by the entry being too costly or time-consuming like in construction, where a concerned undertaking needs to own expensive machines and materials to actually provide its services.31_{For both of the above mentioned factors, the collusion is easier to perform also}

because in markets with such properties, the competitors are familiar with each other, so mutual communication is facilitated and subsequently, the risk that one of them decides to break the agreement is reduced. This is the same case with associations of undertakings, which can be described as groups of individuals and firms with common commercial interests. Even though associations of undertakings are primarily regarded as legal and competition-promoting with the aim of advancing market standards and advocating innovation, they can be quite effortlessly involved in anti-competitive behaviour. Because they are formed of undertakings closely cooperating and with equal interests, they are easily used for collusion, for example for concealing meetings and discussion about implementing bid rigging measures.32

Moreover, relative stability of market conditions can also facilitate the creation of bid rigging in public procurement. If demand and supply are the same over a long period of time and evince stable properties, it is easier to collude in such market because its behaviour is highly predictable. On the contrary, frequent economic changes with supply and demand often varying generate difficult conditions for anti-competitive practices because the

29_{Ibid, p. 2.}

31_Ibid.

(11)

11

predictability of the market is lower. On the other hand, it is important to acknowledge that in time of economic uncertainty, undertakings can be more motivated to rig bids to compensate for lost profits with collusive gains.33 A significant role also plays the frequency of announcing tenders in a given industry. Logically, the more similar tenders there are the higher the probability of competitors colluding.34

Lastly, certain specific attributes of goods or services on given market can also contribute to occurrence of bid rigging practices. When products are identical, undertakings on the market are more likely to agree on the conditions of the anti-competitive agreement, such as on the price structure.35 Equally, when products or services are hard to or even impossible to substitute, it is easier for firms to succeed with their bid rigging agreement as customers are dependent on that particular product or service and have no other choice than purchase it. In the end, low level of technological innovation is also a factor in facilitating collusive agreements as lack of innovation enables it to fruitfully exist over a long period of time.36Constant innovation is an essential part of healthy competition preventing anti-competitive behaviour.

Chapter 2. PUBLIC PROCUREMENT AND BID RIGGING UNDER EU

LAW

2.1 EU legal framework for public procurement

Both public procurement and competition law are especially pertinent fields of public policy and legislation in the EU. As already mentioned, they are both extremely important for the creation and existence of the internal market and important for economic integration with the EU as a whole. Their correct functioning is essential for maintaining an open market economy with free competition as stated under Article 119 TFEU and effectiveness of the

33_Ibid.

36_{United Nations Conference on Trade and Development, Guidelines for Fighting Bid-Rigging in Public}

Procurement (2006), p.16. Available at: https://unctad.org/meetings/en/Contribution/ccpb_SCF_Bid-rigging%20Guidelines_en.pdf.

(12)

12

fundamental freedoms in the TFEU.37 In addition, public procurement represents around 16 per cent of the GDP of the whole Union.38

The EU legal framework on public procurement currently includes three directives: Directive 2014/24/EU on Public procurement, Directive 2014/25/EU on Procurement by entities operating in the water, energy, transport and postal services sectors and Directive 2014/23/EU on the Award of concession contracts. At the same time, these documents repealed previous directives on public procurements, namely Directive 2004/18/EC and Directive 2004/17/EC. The EU Member States had to transpose this secondary legislation into their own national legal systems by 18 April 2016. Article 2(5) of Directive 2014/24/EU on Public procurement defines procurement contracts as “contracts for pecuniary interest concluded in writing between one or more economic operators and one or more contracting authorities and having as their object the execution of works, the supply of products or the provision of services.”

The objectives of the three directives are to reduce the level of bureaucracy present in public procurement by facilitating and increasing the efficiency of processes involved, especially time-wise,39 and simplifying the procedures for benefit of purchasers and businesses. They also aim to promote the principles of transparency, equal treatment, open competition and sound procedural management with the hope to attain a competitive, open and well-regulated procurement market.40 Furthermore, the directives intend to make it easier and cheaper for small and medium-sized enterprises to bid for public contracts, to ensure the best value for money for public purchasers and to respect the EU’s principles of transparency and competition.41

Important changes were introduced as part of these directives to achieve the above mentioned goals. For example, in regard to corruption, Directive 2014/24/EU on public procurement adds measures to increase transparency, such as e-procurement, stresses the

37_{A. Sanchez-Graells, Public Procurement: A 2014 Updated Overview of EU and National Case Law,} e-Competitions: National Competition Laws Bulletin, No. 40647, December 8 (2011), p.1. Available at: https://poseidon01.ssrn.com/delivery.php?ID=66708500307300307812112209102211610700108302704300102 006712311811810611702707508910505810206012110200911506710808811106609211006000503501501506 510203111112709809503401900309911200710911411608800207301402002006708606910410910201211606 8089011111090088&EXT=pdf.

38_{M. Maciejewski, Fakta a čísla o Evropské unii: Veřejné zakázky, Evropský parlament (2018). Available at:} http://www.europarl.europa.eu/factsheets/cs/sheet/34/verejne-zakazky.

39_{Transparency International Česká republika, Rizika korupce a podpodu ve veřejných zakázkách (2018), p. 4.} Available at: https://www.transparency.cz/wp-content/uploads/2018/10/Srovn%C3%A1vac%C3%AD-studie-PRO-WEB.pdf.

40 _{European Commission, Public Procurement (2018). Available at:} https://ec.europa.eu/growth/single-market/public-procurement_en.

41_{European Commission, Public procurement: Legal rules and implementation (2016). Available at:} https://ec.europa.eu/growth/single-market/public-procurement/rules-implementation_en.

(13)

13

obligation to disclose concluded contracts or tightens the obligation concerning the reasons for excluding tenderers from the procurement procedure and furthermore, its Article 24 defined conflict of interest for the first time on the EU level. The emphasis lays on corruption due to its frequent incidence in public procurement; in fact, the RAND Europe study determined that the costs of the risk of corruption related to public procurement is 5 billion EUR a year.42 In addition, the current EU legal framework stresses the need for digitalisation for public procurement, for example, by introducing the European Single Procurement Document, which also supports the fight against corruption in public procurement. Nevertheless, equally as the previous ones, the current directives do not contain a definition on big rigging within this legal field.

The success of this legislation depends on its effective enforcement in the EU member states. The EU law framework is thus important to consider when analysing effective enforcement of public procurement in the Czech Republic.

2.2 EU legal framework for bid rigging

Bid rigging cartels cause substantial economic loss to the EU consumers and the economy as a whole.43 In the EU law framework, bid rigging, although not explicitly named, is therefore included in the prohibition under Article 101(1) TFEU as falling under “agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the market”. It is viewed as a hardcore infringement, in other words an agreement with the object of restricting competition under point 2.4 of the Guidance on restrictions of competition by object for the purpose of defining which agreements may benefit from the De Minimis Notice. For this reason, the exemption under Article 101(3) TFEU is generally not applicable for this anti-competitive practice.

It is important to comment on the broad definition of agreement under EU law. Agreements may be oral and they do not need to be legally binding, they simply come to existence by consensus between parties, in other words by “meeting of minds” with a plan to

42_{M. Hafner, J. Taylor, E. Disley, S. Thebes, Matteo Barberi, M. Stepanek, M. Levi, The Cost of Non-Europe in} the area of Organised Crime and Corruption, RAND (2016). Available at: https://www.rand.org/pubs/research_reports/RR1483.html.

43_{M. Maci, Private Enforcement in Bid-rigging cases in the European Union, European Competition Journal 8}

(2012), p. 211. Available at:

https://heinonline-org.proxy.uba.uva.nl:2443/HOL/Page?collection=journals&handle=hein.journals/eurcompet8&id=211&men_ta b=srchresults.

(14)

14

restrict commercial freedom.44 The form in which the meeting of minds occurs is not relevant as long as it is an accurate expression of the parties’ intention.45 Article 101 TFEU is wide in its scope to also include concerted practices, which can be described as earlier stage of an agreement. Submitted tenders that are not the results of individual economic calculation, but of a concerted practice by, for instance, sharing plans for a public procurement award procedure, are harmful for competition. It is hence no surprising that the Court has been condemning disclosure of information by competitors, even in cases when it occurs after the tender,46 as violating Article 101(1) TFEU.

The violation of competition law by bid rigging is captured as a matter of administrative law, with the European Commission being the respective authority. There are no criminal sanctions for undertakings committing bid rigging, because the Commission does not have criminal enforcement powers; these are exclusive for the Member States. It can therefore only impose administrative fines for violations of competition.47

2.3 Landmark cases of bid rigging in EU law and their implications

The first time the European Commission condemned bid rigging was in the European

Sugar Industry case48 in 1973, in which several major producers of both raw and white sugar within the European Union were involved in bid rigging cartel agreement. The Commission noted that in a system of tendering “competition is of essence” and further explained that if a tender is not a result of individual economic calculation but of either knowledge of the tenders by other participants or of concerted practice, this leads to prevention, distortion or restriction of competition.49

In case Building and Construction Industry in the Netherlands50 in 1992, the Commission proved its intention to further sanction hardcore bid rigging cartels. Here SPO, an association of 28 smaller Dutch building associations, was developing detailed rules of

44_{S. E. Weishaar, Cartels, Competition and Public Procurement: law and Economics Approaches to Bid} Rigging, Edward Elgar Publishing Limited (2013), p. 68. Available at: https://books.google.nl/books?hl=en&lr=&id=3hxe34jQ7scC&oi=fnd&pg=PR1&dq=bid+rigging+eu+law&ots=

TCrbce27AS&sig=NhgMK-F4ADzvTcv9YnghRVJAQVc#v=onepage&q=bid%20rigging%20eu%20law&f=false. 45_{Case T-41/96 Bayer AG v Commission [2000] ECR II-3383, para. 68.}

46_{Case T-29/92 SPO v Commission [1995] ECR II-289, paras. 122 and 123.}

47_{R. Kelly, Tackling Bid Rigging in Public Procurement – Another Means of Curring Public Expenditure During} the Recession, Hibernian Law Journal, Vol. 9 (2010), p. 7. Available at:

https://heinonline.org/HOL/Page?collection=journals&handle=hein.journals/hiblj9&id=17&men_tab=srchresults .

48_{Commission Decision of 2 January 1973 relating to proceedings under Articles 85 and 86 of the EEC Treaty} OJ [1973] L 140/17

49_{Ibid, Section 7, para. 42.}

(15)

15

conduct on price and competition regulation for its members. According to these rules each member of the association had to announce if they were submitting a bid in a particular project. In case more members were involved in the same project, meetings were organized to discuss the details of the bids submitted. In addition, the rules governed the calculation of costs, which were increased by the price needed to cover the costs of unsuccessful contractors and the protection of the designated winner. On the basis of this, distortion of the individual offers took place and thus elimination factual competition between the tenderers. The Commission imposed a fine of EUR 22.5 million on SPO and furthermore threatened to initiate proceedings against the Netherlands under Article 285 TFEU for having encouraged such anti-competitive practice.51 Such approach from the Commission side suggests that already at that time, as well as it does now, it expected the Member States to tackle bid rigging effectively. Another distinctive feature of this case was that the Commission rejected arguments for the possibility of applying the exemption under 101(3) to bid rigging cases.52

The Elevators and escalators53 case marked a major step by the Commission when it fined, at that time, extreme amount of EUR 992 million. Companies Otis, KONE, Schindler and ThyssenKrupp operated bid rigging cartels for sale, installation, maintenance and modernisation of elevators and escalators in Belgium, Germany, Luxembourg and the Netherlands.54_{The then Commissioner for Competition, Neelie Kroes, stressed the purpose of}

the intensity of the fine by saying that “the damage caused by this cartel will last for many years because it covered not only the initial supply but also the subsequent maintenance of lifts and escalators – for these companies the memory of this fine should last just as long.”55 Another important feature of this case was the granting of full immunity from fines to KONE (on the Belgian and Luxembourgish markets) and Otis (on the Dutch market), which provided further incentives for future leniency applicants to come forward and cooperate.56

51_{R. Whish and D. Bailey, Competition Law, Oxford University Press (2018), p. 548.} 52_{Ibid, p. 549.}

53_{Commission Decision of 21 February 2007, substantially upheld on appeal Cases T-141/07 etc General}

Technic-Otis v Commission EU:T:2011:363

54_{A. Font Galarza, G. Cserey, R. Plank and E. Post, Cartel fined in the elevators and escalators sector,} Competition Policy Newsletter No. 2 (2007), p. 39. Available at: http://ec.europa.eu/competition/publications/cpn/2007_2_39.pdf.

55_{European Commission, Competition: Commission fines members of lifts and escalator cartels over €990}

million (2007). Available at: http://europa.eu/rapid/press-release_IP-07-209_en.htm?locale=en.

56_{A. Font Galarza, G. Cserey, R. Plank and E. Post, Cartel fined in the elevators and escalators sector,} Competition Policy Newsletter No. 2 (2007), p. 42. Available at: http://ec.europa.eu/competition/publications/cpn/2007_2_39.pdf.

(16)

16

Chapter 3. PUBLIC PROCUREMENT AND BID RIGGING UNDER

CZECH LAW

3.1 Legal framework for public procurement law in the Czech Republic

Public procurement holds an especially important position within the Czech competition law and economy. In 2018 alone the cost of public procurement in the Czech Republic amounted to CZK 624 billion out of the total of CZK 5 304 billion of gross domestic product57 (henceforth referred to as GDP). This means that 11,8 per cent of the total GDP of the country was dedicated to public procurement and a similar pattern can be observed in years 2013 to 2017 when the percentage fluctuated between 10 and 13.5 per cent. It is therefore undisputable that the Czech market evinces a stable involvement in public procurement and that it plays an important role in the economy. In fact, the Czech public procurement market is the third biggest in Europe relative to GDP, after Austria and Belgium.58Not only because of this but also due to redistribution of large amounts of public funds it involves and the increasing number of public contracts, public procurement law is a highly watched area by both the Office for the Protection of Competition of the Czech Republic, which is the responsible authority, and the media. The increasing number of public contracts is directly associated with the frequent use of EU funds, which allow smaller contracting authorities, such as municipalities, to award public procurements.59

Public procurement in the Czech Republic is currently governed by Act No. 134/2016 Coll., on Public Procurement, which repealed Act No. 137/2006 Coll., On Public Procurement and Act No. 139/2006 Coll., on Concession License Contracts. The new Public Procurement Act transposes the provisions of the European review directives which regulate the specificities of the review procedures for public procurement and strengthen the guarantees of the principles of transparency and non-discrimination in public procurement.60_{It defines}

public procurement under Article 2(1) as “the conclusion of a contract for pecuniary interest

57_{Ministerstvo pro místní rozvoj ČR, Výroční zpráva o stavu veřejných zakázek v České republice za rok 2018} (2019), p. 9. Available at: https://www.mmr.cz/getmedia/0b48663f-8876-4e5f-af24-e8a972ea5546/Vyrocni-zprava-o-VZ-za-rok-2018.pdf.aspx?ext=.pdf.

58 _OECD, _Newsroom _Report _on _Government _Procurement, _p. _39. _Available _at: http://www.oecd.org/newsroom/archives/1845927.pdf.

59_{A. Schelleová, Úvod do problematiky veřejných zakázek, Právnická fakulta Masarykovy univerzity, Úřad pro} ochranu hospodářské soutěže (2015), p. 47. Available at: https://www.law.muni.cz/sborniky/dp08/files/pdf/sprava/schelleova.pdf.

60_{OECD Directorate for Financial and Enterprise Affairs, Annual Report on Competition Policy Developments}

in the Czech Republic (2018), p. 14. Available at:

(17)

17

between a contracting authority and an economic operator which establishes the economic operator’s obligation to supply supplies, provide services or execute works.”

The legislation aims to set clear rules on public procurement to prevent corruption, ensure economical use of public funds, effective realization of necessary public projects and the fair competition of the contractors.61 Equally as the directive, the Czech Act also aspires to curtail the presence of bureaucracy in this legal field while maintaining transparency of the procedures.

3.2 Inclusion of bid rigging in the Czech legal provisions

Although not mentioned specifically, the practice of bid rigging is, as an “agreement distorting competition”, included under Article 3 of the Act No. 143/2001 Coll., on the Protection of Competition. This is similar to the EU legal framework, where bid rigging is similarly included, but not named, under Article 101 TFEU. It may be seen as startling that the Czech legislation on public procurement, which is in this case the lex specialis, does not include any clear definition of bid rigging when it represents such a pressing problem for the Czech competition law. Neither did the Act 137/2006 Coll., on Public Procurement include any provisions on bid rigging, nor does the new Act 134/2016 Coll., on Public Procurement.

However, the Amendment to this Act implemented on April 1, 2012 introduced a new requirement on the content of tenders. According to this the undertakings involved in a public tender must submit a statement proclaiming that they have not concluded and will not conclude any prohibited agreement under the Act No. 143/2001 Coll., on the Protection of Competition. Upon failure of submitting this statement the given undertaking can be excluded from the tender in question.

Moreover, the new Act 134/2016 Coll., on Public Procurement introduced “Preliminary market consultations” under Section 33, which provides that “the contracting authority may conduct market consultations with experts or economic operators with a view to preparing procurement documents and informing economic operators of its plans and requirements, provided that it does not distort competition”. The objective of such institute is to thoroughly prepare the public procurement and to inform economic operators of the plans and requirements in the given case.62 The “provided that it does not distort competition” part is critical, because if distortion of competition occurs, the procurement authority may exclude

61_{M. Fuchsová, M. Stárková, New Public Procurement in the Czech Republic – Part One, Legal Knowledge} Portal (2017). Available at: https://legalknowledgeportal.com/2017/01/12/new-public-procurement-in-the-czech-republic-part-one/.

(18)

18

the respective participant from the procedure. Potential contractors can also participate in the preliminary market consultations, which, however, may be problematic. This is because any engagement of the contractor in these consultations causes high suspicion among the other tenderers.63

These measures may be regarded as preventive measures against bid rigging; however, their efficiency is questionable and most of all, it remains the surprising truth that bid rigging still lacks a clear definition in the Czech legal order. One may question whether laying down a legal framework for bid rigging would bring more effectiveness into dealing with this pressing issue of the Czech public procurement law.

3.3 Bid rigging in Czech criminal law

Unlike in the EU legal order, in the Czech Republic bid rigging can also be caught under the Criminal Code Act No. 40/2009 Coll., laying down rules for criminal offences. Although bid rigging as such is not mentioned as a crime, several articles under Chapter VI Economical Criminal Offences can be interpreted widely as including this anti-competitive practice. Article 248 of the Code imposes a sentence up to three years to “anyone who contrary to legal regulations on protection of economic competition enters an agreement on determination of price, division of market or another agreement impeding economic competition with another competitor”. Coming back to the forms of bid rigging, where tenderers often, for example, apportion market geographically or into specific customer groups, it is clear that bid rigging can easily fall under the definition of this criminal offence.

Moreover, Article 256 of the Criminal Code adds that imprisonment of six months to three years or prohibition of activity impends to anyone who “arranges in relation to appointment of public contract, public contest or public auction an advantage of priority or preferential conditions for a supplier, contestant or auction participant to the detriment of other suppliers or contestants with the intention to cause damage to another or to gain profit for him-/herself or for another”. It is, however, necessary to state that Article 256 is a special provision only applicable together with Article 331 of the Criminal Code relating to acceptance of a bribe. For bid rigging to fall under this Article, it is hence necessary that an act of bribery is present as well. This is, however, the case relatively often as public procurement is prone to corruption, naturally bribery being one of the most frequent forms of

63_{T. Grulich, Vybrané problémy nové právní úpravy zadávání veřejných zakázek, Právní rozhledy č. 20 (2016).}

Available at:

(19)

19

corruption in this area. Fraudulently acting tenderers can bribe the staff of contracting authorities or influence the supposedly impartial third parties like lawyers or notaries.64

Lastly, Article 257 of the Criminal Code further states that “whoever commits machinations in relation to commission of a public contract or public contest” can be either incarcerated for up to three years or face prohibition of activity in this field. Machinations are understood, for instance, as “asking or accepting material or other profit for refraining from participation in submitting propositions in auction”, which can be interpreted as referring to bid suppression where tenderers do not submit their bids in favour of the predetermined winner in exchange for receiving the procurement gains.

Nevertheless, it is necessary to specify that pursuant to the Czech Act No. 418/2011 on Criminal Liability of Legal Persons and Proceedings against Them, offences contained in Articles 256 and 257 of the Criminal Code may be committed by a natural as well as legal person. On the contrary, the perpetrator under Article 248 can only be a natural person.

3.4 Delineation of the term bid rigging in the Czech legal sphere

Since bid rigging is absent from the Czech legislation on competition law, it is necessary to provide at least a delineation of this term in order to critically assess the enforcement of public procurement in relation to this practice in the Czech Republic. The scope of the term can be found in documents issued by the Office for the Protection of Competition and also in academic literature. The Office summarizes bid rigging as a “prohibited agreement between bidders in a tender. Candidates agree before submitting bids that they will not act independently and compete, but will submit matching bids or some of them will not participate in the competition at all. The goal is to achieve more profitable conditions for the winner of the public procurement procedure. This is a particularly dangerous market behaviour which leads to higher prices and lower quality performance. It usually includes both elements of price agreements and market sharing agreements, which are the two most serious types of competition law violations. These agreements have a devastating impact on the public budget.”65

For the application, the most systematic approach in academic literature is presented by Czech authors Raus and Oršulová.66 According to them, the first condition for the

64_{Úřad pro ochranu hospodářské soutěže, Bid rigging zakázaná dohoda o ovlivňování nabídek (2012), p. 14.} Available at: https://www.uohs.cz/download/info_listy/2012/info_list_1_2012.pdf.

65_{Ibid, p. 4.}

66 _{D. Raus, A. Oršulová, Kartelové dohody, C.H. Beck (2009), p. 121-124. Available at:} https://books.google.nl/books?id=OLrJHoiXm3MC&pg=PA270&lpg=PA270&dq=program+leniency+kartelov %C3%A9+dohody&source=bl&ots=D_9hfsfMQV&sig=ACfU3U1wl8pAr8kzaHh_zOP677N2fL0tRA&hl=en&

(20)

20

existence of bid rigging is the announcement of a tender, which is commonly paid from public funds. The second feature is the collusion of undertakings taking part in the public procurement. Any kind of coordination is sufficient, which is similar to EU competition law, in which an agreement has a broad meaning and can be legally binding or not, written or oral, without any physical meeting of the parties or can be even a mere concerted practice, where a formal agreement has not been reached. Limitation to purely binding decisions written on paper would significantly restrict the range of actions that can be sanctioned as bid rigging. However, it must always concern a collusion that is illegal and in no way necessary for the needs of the public procurement in question. The third condition for recognition of bid rigging is that it occurs in one of its many possible forms that were described above.

The definitions of bid rigging given by both the OECD and the Office for the Protection of Competition will be worked with and used as default when answering the research question of this essay.

3.5 First case of bid rigging in the Czech Republic

Operations of lodgings at operational centers of the Military Acommodation and Building Administration Litoměřice67 was the landmark bid rigging case uncovered on the territory of the Czech Republic. While it certainly wasn’t the first one to occur there, it was the first case where the Office for the Protection of Competition was able to prove its existence and imposed a fine of CZK 4 906 million on its participants. In this case five tenderers colluded by concerted practices in the award procedure since one company drafted bid prices for the other companies and sent them to the other by email. The submitted bids were therefore agreed in advance and the winner of the tender was predetermined, which corresponds with the cover bidding practice of bid rigging. An interesting element of this case is that for the participants bid rigging seemed to be a quite normal activity with little awareness of committing a criminal act.68

As striking as it might be, this took place only in 2011, while the Commission identified the existence of bid rigging cartels in the EU market already in 1973. The decision to impose the fine was challenged at the Regional court in Brno with the argument that

sa=X&ved=2ahUKEwio95H-pfjiAhXPQ0EAHVI6AxgQ6AEwA3oECAkQAQ#v=onepage&q=program%20leniency%20kartelov%C3%A9 %20dohody&f=false.

67_{Úřad pro ochranu hospodářské soutěže, První bid riggingový případ potvrdil Krajský soud v Brně (2013).} Available at: https://www.uohs.cz/cs/hospodarska-soutez/aktuality-z-hospodarske-souteze/1634-prvni-bid-riggingovy-pripad-potvrdil-i-krajsky-soud-v-brne.html.

68_{A. Braun, Penalty for first Czech Bid Rigging Case Confirmed by Court, Kluwer Competition Law Blog} (2013). Available at: http://competitionlawblog.kluwercompetitionlaw.com/2013/07/15/penalty-for-first-czech-bid-rigging-case-confirmed-by-court/.

(21)

21

individual participants have been persecuted under criminal law as natural persons and created a ne bis in idem situation. However, the Court upheld the Office’s original decision.69 The implication of this case is that it served as a basis for further investigations and sanctioning of bid rigging by the Office for the Protection of Competition but also, for example, suggested that tenderers in the Czech Republic should be more educated on this matter.

Chapter 4. EFFECTIVE ENFORCEMENT IN THE CZECH REPUBLIC

4.1 The role of the Office for the Protection of Competition

The protection of competition is in the Czech Republic is institutionally ensured by the Office for the Protection of Competition which has its seat in Brno. The scope of competences is defined by the Act No. 273/1996 Coll., as amended by the Act No 187/1999 Coll. According to Article 2 of the Act, the Office a) creates conditions for the support and protection of competition, b) maintains supervision over public procurement and c) performs other tasks provided by special laws. The emphasis lies on its complete independence and independent decision-making process.

Within the sphere of public procurement, the Office overlooks the correct procedures under the Public Procurement Act, imposes corrective measures, deals with offences of the contracting authorities and imposes fines.70 Regarding bid rigging in particular, under Article 22(2) of the Act No. 143/2001 Coll., on the Protection of Competition, the Office can impose fines up to CZK 10,000,000 to a natural person for concluding a bid rigging agreement. Pursuant to Article 22(a) of the same Act, it can also impose fines up to CZK 10,000,000 or 10 per cent of the net turnover earned by the undertaking for the last completed accounting period, to a legal person or natural person carrying out business. Together with a fine, the Office can also impose a ban on the performance of public contracts for a maximum period of 3 years. The sanctioning actions of the Office for the Protection of Competition can therefore have considerable effects on undertakings involved in bid rigging agreements.

The objective of the Office is to attain, mainly through its decision-making activities, a free and open competition between suppliers and to devoid any discrimination in a transparent

69_{Úřad pro ochranu hospodářské soutěže, První bid riggingový případ potvrdil Krajský soud v Brně (2013).} Available at: https://www.uohs.cz/cs/hospodarska-soutez/aktuality-z-hospodarske-souteze/1634-prvni-bid-riggingovy-pripad-potvrdil-i-krajsky-soud-v-brne.html.

70 _{Úřad pro ochranu hospodářské soutěže, History of the Office (2009). Available at:} https://www.uohs.cz/en/about-the-office/history-of-the-office.html.

(22)

22

manner.71 However, in the sphere of public procurement, the ultimate objective of the Office for the Protection of Competition is the preservation of public funds. Resources are given to investigations of both horizontal and vertical public procurement agreements equally since both levels are necessary for the development of fair market environment.72 In case the Office detects a violation in the competitive process of public procurement, it may choose to follow remedial measures, for example, reinstating the unfairly excluded bidder to the tender or annulling the whole procedure. If the public contract is concluded by the time the Office uncovers the violation, it can only impose fines as opposed to the remedial measures which can be implemented before completion of the contract.73 Further within the area of public procurement, the fight against bid rigging as a prohibited agreement is regarded as a clear priority of the Czech national competition authority. In 2018, in 5 cases a total of 25 undertakings were fined for rigging bids in public procurement, predominantly in the construction sector.74

Effective enforcement of competition law requires cooperation on several levels. At national level, the Office for the Protection of Competition works closely with sector regulators, government and courts. It engages in activities, for example, with the Unit for Combating Corruption and Financial Crime or the Supreme Audit Office. On the European level, the cooperation mainly consists of negotiations with the European Commission, namely with the Directorate General for Competition.75 Expert workers of the Office are involved in the activities of individual committees and working groups of the European Competition Network, which creates an effective mechanism to effectively counter cross-border practices distorting competition as it unites national competition authorities of all EU Member States.76

71_{OECD Directorate for Financial and Enterprise Affairs Competition Committee, Annual Report on}

CompetitionPolicy Developments in Czech Republic (2019), p. 11. Available at: http://www.oecd.org/officialdocuments/publicdisplaydocumentpdf/?cote=DAF/COMP/AR(2019)6&docLanguag e=En.

72_{OECD Directorate for Financial and Enterprise Affairs Competition Committee, Global Forum on} Competition, Fighting corruption and promoting competition: Contribution from the Czech Republic (2014), p.

4. Available at:

http://www.oecd.org/officialdocuments/publicdisplaydocumentpdf/?cote=DAF/COMP/GF/WD(2014)55&docLa nguage=En.

73_{OECD Directorate for Financial and Enterprise Affairs Competition Committee, Annual Report on}

CompetitionPolicy Developments in Czech Republic (2019), p. 11. Available at: http://www.oecd.org/officialdocuments/publicdisplaydocumentpdf/?cote=DAF/COMP/AR(2019)6&docLanguag e=En.

74_{Ibid, p. 4.}

75_{Mendelova Univerzita v Brně, Institucionální zajištění antimonopolní politiky v České republice (2017).} Available at: https://is.mendelu.cz/eknihovna/opory/zobraz_cast.pl?cast=71678.

76 _European _Commission, _European _Competition _Network _(2018). _Available _at: http://ec.europa.eu/competition/ecn/index_en.html.

(23)

23

Cooperation and exchange of experiences is furthermore arranged through the International Competition Network, with the goal to facilitate effective international cooperation to the benefit of member agencies, consumers and economies worldwide.77 Lastly, the Office also collaborates with the OECD as part of the conferences of the Working Group on Cooperation and Enforcement of Competition Law, where current topics, such as the bid rigging issue in public procurement, are discussed. The documents issued by the OECD serve as a basis for some of the Office’s policies, for example, it closely follows the Guidelines for Fighting Bid Rigging in Public Procurement.78 Lastly, it is also important to mention the European Competition Authorities, which functions as a forum for discussion of the European national competition authorities, of which the Czech Office for the Protection of Competition is naturally a part.

4.2 The approach of to detection of bid rigging

The Office for the Protection of Competition is largely dependent on the public reporting any suspicious behaviour in public procurements. The Office in its Information List on Bid rigging79 as well on its official website recommends the exact steps anyone suspecting a bid rigging collusion in public procurement should undertake. The Office suggests to never consult or publish the suspicion, rather it endorses the person in question to privately collect as much evidence as possible and contact the Office, which will conduct further investigation and is able to provide protection and anonymity if necessary.80

However, the Office also endeavours to develop new strategies, or ameliorate the existing ones, to detect bid rigging agreements itself and to improve its efficiency. A new approach in fighting these anti-competitive practices is working closely with the Bulletin of Public Procurement Contracts,81 which is the main source of data and information about public procurement in the Czech Republic. This online database contains specific details about each tender, for example, the final price offer of the winner, ex-ante estimate of the price by the contracting authority, number of participants or type of selection procedure used

77 _{International} _Competition _Network, _About _the _ICN _(2018). _Available _at: https://www.internationalcompetitionnetwork.org/.

Procurement: Helping governments to obtain best value for money (2009). Available at:

79_{Úřad pro ochranu hospodářské soutěže, Efektivní dozor nad veřejných zadáváním a soutěžní regulací,} Informační list 2 (2018), p. 19. Available at: https://www.uohs.cz/cs/informacni-centrum/informacni-listy.html. 80_Ibid.

81 _Ministerstvo _pro _místní _rozvoj, _Věstník _veřejných _zakázek. _Available _at: https://www.vestnikverejnychzakazek.cz/.