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The UK government faces a “significant risk of bid rigging” by contractors, the head of the competition regulator has warned.
Competition and Markets Commissioner Sarah Cardel is piloting a new tool powered by artificial intelligence that could help the agency catch companies colluding when bidding for public contracts. said.
The pilot program, which uses AI to collect data at scale, is part of an attempt to reduce fraud and waste in the UK’s £300bn annual public procurement market.
“We know that the procurement market is at significant risk of collusion,” Cardel told the Financial Times. “We now have the ability to scan data at scale, bid data at scale, identify anomalies in that bid data, and identify areas of potential anti-competitive conduct.”
A pilot program with one government department “proved to be very successful,” she said.
Last month, the CMA announced a new collusion investigation into suspicious practices related to the Department of Education’s School Improvement Fund.
The agency said it has reason to suspect that several companies providing roofing and construction services conspired to rig bids to win contracts through funds used to protect educational facilities.
In 2023, the CMA fined 10 construction companies nearly £60 million for rigging bids to win demolition and asbestos removal contracts.
Public procurement has come under intense scrutiny in the UK in recent years, as a number of contracts concluded in connection with the coronavirus pandemic raised questions about a lack of transparency and conflicts of interest between suppliers and politicians. It becomes. Procurement accounts for around a third of public spending, totaling £329bn in 2021-22.
A new ban, due to come into force early this year, will see companies banned from bidding on public contracts if they are found to have breached competition law.
“We think this (program) has real potential to drive billions of dollars in savings in public funds, but it also clearly increases public sector productivity. It’s a core element of (the agency’s) growth mission,” Cardel said.
The agency was given a specific mandate by the previous government to prioritize growth, but has faced criticism from Sir Keir Starmer’s government over its provision of indicators.
Speaking at a gathering of global business leaders in October, the Prime Minister said: “I want to make sure that all the regulators in this country, especially the economic and competition regulators, take growth as seriously as this conference does.” said.
Mr Cardel also defended the CMA’s record, saying the strategic direction set out two years ago meant that “supporting productive and sustainable growth across the UK economy is a priority for the CMA. It has been made clear.”
The watchdog will also review the application of “behavioral remedies” in merger awards in 2025. Instead of forcing companies to sell their businesses, these remedies use other measures, such as price freezes, to protect consumers.
