0. Data Analysis in the PCA’s Public Procurement Strategic Action Plan
Nuno Rocha de Carvalho
Portuguese Competition Authority
“Romanian Competition Council: Accomplishments and Perspectives” May , Bucharest 15

1. PCA’s Strategic Plan Broad Approach & Policy Mix
The PCA has set Public Procurement as a key priority
The PCA has devised a Strategic Action Plan for Public Procurement
Broad Approach:
Fighting bid rigging
Promoting efficiency
Aligning incentives with public bodies carrying procurement
Awareness
Accountability
Policy Mix:
Advocacy + Strengthening enforcement
Ex-ante + Ex-post action
Cornerstones of the PCA’s Strategic Plan
Fight Bid Rigging
Promote Efficiency
Align Incentives
Goals 15

2. Fighting Bid-Rigging Reactive detection methods
Reactive detection methods: Complaints and Leniency
The PCA’s 2006 Leniency Programme was revamped in 2012 and is now more successful
Reactive detection tools are indispensable to PCA’s fight against bid rigging
Use of Reactive detection methods is prevalent in competition agencies’ anti-cartel enforcement and the PCA is no exception
Will always remain central in fighting bid-rigging - ensure “hard” evidence for the case. 15

3. Fighting Bid-Rigging Complementarity between reactive and proactive action
Is there an overreliance on reactive action (complaints and leniency applications)?
Diversifying the NCAs detection tool box is essential to maximise both detection and deterrence
Well acknowledged strategic complementarities btw Proactive and Reactive detection tools:
Proactive Detection Methods may be key for efficient reactive action (OECD):
Change the perception of the detection risk: weaken incentives for collusion or lead to cartel instability
Allow detection of cartels to occur sooner (esp., long-lasting stable cartels)
Increased detection risk may in turn be a driver of more leniency applications
Mixed approach
Within a case, it may be useful to use a broader range of articulated tools, to guide the investigation and produce a body of compelling evidence. 15

4. Using Screens to detect Bid Rigging in Procurement Pros and cons vis à vis other market settings
Encouraging Factors
Added Challenges
Data availability (in the public domain / e-procurement)
Bidding rings may take different and quite complex forms
Often more discernible patterns
The different bid-rigging schemes are not mutually exclusive
Interface with Contracting Authorities
(“The Third Party”)
May involve various procurement procedures - over time, across different geographical areas, different contracting authorities, different goods and services 15

5. Detecting Bid Rigging Contracting Agencies
Often, discussions dichotomise investigations as ex officio vs. leniency-triggered, but this is not so clear-cut
In practice, the dividing line between reactive and proactive detection methods can be blurry: an NCA’s investment in data analysis usually follows a complaint or suspicion
In Public Procurement, contracting agencies have a key role in providing input vital to targeting the data-screening exercise:
Prior knowledge on what sectors/procurement contracts/events to look at;
Prior knowledge on the potential bid rigging mechanism, participants and time-frame;
Input on fine-tuning the NCA’s screen of data. 15

6. Data availability, coverage and quality Encouraging developments
Increasing availability of procurement data for a variety of purposes (auditing, fighting corruption, benchmarking)
Broad e-procurement datasets open interesting avenues for proactive detection methods
may be a powerful tool in fighting bid rigging
may increase the detection rate.
New EU Directives on Public Contracts – transition to e-procurement
Portugal is a pioneer in what concerns mandatory e-procurement
E-procurement and centralised registration of all competitive public procurement procedures in online web portals since November 2009.
Centralised web portal (Portal Base) covers public contracts from 2009 onward 15

7. Data availability, coverage and quality Challenges
Portal Base is only compulsory for competitive procedures and “framework agreements”.
Direct awards do not have to be fully run in Portal Base – which limits the available info
In 2013, Portal Base accounted for around 20% of the total value of public contracts
Personal data protection issues have been delaying the PCA’s full access to Portal Base dataset 15

8. Addressing the challenges Targeting data screening
Targeted screening vs. “blind screening”: hopeless search
PCA issues data requests for certain procurement procedures/sectors based on information brought to it by third parties
A hybrid approach – mixed use of reactive & proactive detection methods
Analysis to sub-datasets has uncovered information quality issues (information gaps), Tackling these issues in the broader dataset would require considerable time and effort 15

9. The Role of contracting agencies – PCA’s Advocacy Initiatives
PCA’s Guidelines on Fighting Collusion in Public Procurement issued in Dec 2015
PCA’s “Fighting Bid Rigging Campaign”
To be launched June 2016
5 outreach sessions to contracting authorities
Increase PCAs’ detection skills
Promote the design of more “collusion proof” tenders
Establish close communication channels with the relevant entities
Engage the “Third Party” in the PCA’s policy aims 15

10. The Role of contracting agencies – Aligning Incentives through advocacy
Procurement officials vigilant about the need to ensure a regular and timely supply
Focus on allaying fears of disruption upon suspicion of a collusive scheme in a tender
Making cartel detection a shared objective for the Competition Authority and procurement agencies
Aligning incentives:
Raising awareness
Promoting accountability
Performance Assessment
Shift from a formalistic box-ticking to an outcome based approach 15

11. Policy-mix approach 15

12. Mulţumesc!

13. Nuno Rocha de Carvalho Member of the Board 15