Using Multiple Tools to Enhance Competition in Public Procurement

Well-functioning competitive procurement is essential to reach efficiency of public services and public spending. Drawing from the experience of the Italian competition authority (AGCM), this paper argues that fostering competition in public procurement is most effective when employing a diverse range of tools. First, identifying the functioning of compensatory mechanisms that result in anomalous bidding behaviour, as well as diversifying the sources of information, is important for effectively prosecuting bid rigging ex post and helping contracting authorities detect anticompetitive conduct. Second, ex ante advocacy contributes to enhancing the competence of public buyers, helping them design pro-competitive procurement processes. Third, adopting legality rating systems incentivizes compliance with competition law and also helps select the most efficient bidder. The paper makes these points whilst reviewing enforcement practice.