Bid rigging: when competition law meets public procurement

The Public Procurement and Competition regimes share a common goal which is to enable and preserve an open market to maximise consumer choice and benefit. The former seeks to achieve this by opening up delivery of public sector activities to a wider range of suppliers. The latter seeks to do so by ensuring the suppliers genuinely compete with each other.

Following a recent investigation into the construction sector, the Competition and Markets Authority ('CMA') has indicated that bid-rigging in public sector procurement will be a focus for future competition enforcement activity.

Bid rigging

Bid-rigging involves businesses colluding in public sector tenders. This can take many forms including:

• bid rotation (including where firms agree to share a market between them by agreeing to bid in turns);

• bid suppression (such as agreeing not to bid);

• cover pricing (for example, to artificially raise a tender price to make other bids appear better value); and

• collaboration (where firms agree to submit a joint bid, even though they could evidently submit individual bids.

This can amount to anti-competitive behaviour in breach of competition law. Bid-rigging can inflate prices and reduce consumer choice, both being primary objectives of the CMA to prevent.

How the CMA detects bid rigging

The CMA has recently announced that bid-rigging in public procurement is an area in which it will apply new enforcement techniques, using AI and other data science tools to scan bidding data for signs of unlawful activity.

Both in its draft annual plan and in a response (which it gave in September 2025) to the Cabinet Office’s consultation on public procurement, the CMA has indicated its intention to use data science tools for the purposes of detecting bid-rigging in public procurements. At the start of 2025, Sarah Cardell said that the CMA was trialling the use of these tools, said to be backed by artificial intelligence.

In Spain, the CMA’s equivalent Comision Nacional de los Mercados ('CNMC') has had success in using data analysis techniques for detecting irregularities in bidding for public contracts and has been helped by the introduction of a procurement platform which has allowed it to gather data on losing as well as winning bids.

In the UK, the Central Digital Platform ('CDP'), which is the hub for information about public procurements, takes an important step towards the goal of building datasets that are fit for purpose. The CMA would like to see if the CDP could be extended to require procuring authorities to upload data on unsuccessful bids (without which it will be difficult to assess patterns of collusion between bidders). This may require legislative change (for example, to address the question of how to handle bidders’ commercially sensitive data, and to ensure there are sufficient powers available within the existing statutory scheme).

Examples of CMA activity

In a cover pricing case in 2023, the CMA investigated 10 construction companies who were fined nearly £60m for rigging bids for demolition and asbestos removal contracts. The companies had colluded to submit bids that were deliberately designed to lose, such that the winning supplier did not face genuine competition for the bid.

The CMA also has an ongoing investigation into suspected anti-competitive bid-rigging in relation to the supply of roofing and other construction services to schools which received public funding for these services. This was launched in 2024 with 'dawn raids' and was recently broadened in scope, with more parties added.

Collaborative bidding

Collaborative bidding (so called 'extended enterprises') are often employed to increase the resource and experience levels of the bidders. Collaborations often include non-compete clauses in the collaboration agreement.

Where the collaborating parties can otherwise bid independently or the non-competes / anti-poach clauses are not restricted to that particular collaboration then the clauses may give rise to competition law concerns. If these concerns are serious (e.g. price fixing, market, output or technology restriction or sharing) then these could be regarded as 'hardcore' restrictions meaning they could not be exempted from competition law prohibitions by way of block exemptions (e.g. SABEO, RandDBEO).

However, the primary risk with collaborations is the exchange of competition sensitive information between the parties (such as information about future pricing, pricing methodology, market strategy or operational plans) which could be used to initiate cartel style behaviour (such as price fixing or output or market splitting) going beyond the needs of the actual collaboration itself.

It is therefore encouraged that collaborative bids should either be submitted through an SPV or other joint venture or employ a type of information disclosure arrangement called a 'clean team agreement'. This does not prohibit disclosure, but rather creates a process by which (and to whom) disclosure should take place.

Consequences of bid rigging

These are potentially wide-ranging and can include significant fines (up to 10% of worldwide turnover), as well as director disqualification and even prison (in the most serious criminal cases).

Procurement law also has exclusion and debarment regimes. There is a new system for excluding suppliers who are involved (or potentially involved) in infringements of competition law. There are mandatory and discretionary grounds of exclusion. In both cases, the exclusion ground is subject to a 'self-cleansing' regime and applies when the circumstances giving rise to the application of the exclusion ground are continuing or likely to occur again.

Mandatory exclusions apply where a supplier or connected person (group member or supply chain for the tender, whether UK or international) has been:

• convicted of the criminal cartel offence under the Enterprise Act 2002.

• found by a competent authority like the CMA to have infringed competition law by taking part in cartel activity (e.g. bid rigging).

• is a quinquennial entry on the centrally published debarment list.

Discretionary exclusions apply where the contracting authority considers that the supplier, or a connected person, has

• engaged in cartel activity, regardless of a CMA (or other regulator) decision, unless immunity from prosecution has been given.

• infringed the abuse of dominant position (monopolies / monopsony) prohibition, or where the CMA (or other competition regulator) has made a decision to that effect.

• engaged in conduct constituting a cartel offence or a substantially similar offence under the law outside of the UK, unless immunity from prosecution has been given.

While it will be a question of fact as to whether a mandatory exclusion ground applies, a contracting authority is required to exercise its judgement in determining whether a discretionary exclusion ground applies. Discretionary exclusion grounds must be applied consistently to all suppliers in the same position.

There is an implied right for a contracting authority to terminate a public contract awarded under the Act, including where the supplier becomes excluded or excludable during the term of the contract.

In its guidance to authorities on competition-related exclusions, the CMA has set an email helpline for contracting authorities to seek the CMA’s input. The guidance invites contracting authorities to contact the CMA to 'ask for more information to assist them in determining whether the discretionary exclusion grounds apply where a supplier is or may be under investigation'.

Conclusion

The CMA’s recognition is that public procurement is one of the main ways that the U.K. Government can realise its ambition of economic growth. Procurement should boost the UK’s competitiveness – by building supply chain resilience and providing a vital stepping stone for scaling up high-potential firms. This is undermined where bid-rigging activity takes place.

It follows that the scope for competition law infringement in public procurement is firmly on the CMA's radar. Public Authorities and suppliers will want to revisit their competition compliance programmes and ensure that they understand the relationship between competition law and the procurement rules. All of this points to an appetite for more enforcement activity. It is essential that suppliers understand how competition rules interplay with procurement law and the consequences of being found to have failed to comply with them. The consequences across the procurement and competition law regimes are wide-ranging.