The New South Wales Government has partnered with the Australian Competition and Consumer Commission (ACCC), in a bid to stop suppliers from colluding and illegally raising prices on government contracts.
The new agreement will see the NSW Government share detailed tender data and information with the ACCC, which will enable the regulator to detect suspicious patterns that may indicate “bid rigging”.
Artificial intelligence (AI) is set to play a central role in the partnership, processing large volumes of contract documents, submissions, tender data and other relevant information before it is handed over to the ACCC for screening.
Treasurer Daniel Mookhey said partnering with the ACCC means the NSW Government can deploy world-leading technology to deter would-be conspirators.
“There are many good operators in NSW – and those are the companies we want to do business with,” he said.
“This agreement is designed to neutralise bid rigging and other cartel conduct in order to get the best outcomes for NSW taxpayers.”
The Organisation for Economic Co-operation and Development (OECD) has estimated that improving competition and stopping collusion could save the NSW Government up to 20 percent on its $42 billion annual goods, services and construction spend.
Suppliers who are found to be working together to raise prices or lower the quality of the goods or services offered in public tenders could be prosecuted by the ACCC and suspended from working with the NSW Government.
The partnership was inspired by other OECD countries, including South Korea which flags around 80 cartel cases per month. Between 2018 and 2021, 26 investigations led to fines totalling approximately A$15 million.
Minister for Domestic Manufacturing and Government Procurement Courtney Houssos said the NSW Government has a “zero-tolerance approach” to illegal conduct.
“Using the expertise and legal powers of the ACCC will keep suppliers honest and make sure we deliver the best outcomes for the state for each project,” she said.
“We want the NSW Government to spend less money on illegally inflated contracts and more on the essential public services that families and households rely on.”
ACCC Chair Gina Cass-Gottlieb shared the NSW Government’s enthusiasm, stating that the ACCC looks forward to the new data sharing arrangements.
“We are committed to working with all levels of government to prevent government procurement processes from being the target and victim of cartel conduct,” she said.
“Cartel arrangements, such as bid rigging, often inflate costs for consumers or other businesses and are a serious breach of the law.
“Enforcing cartel laws is an ongoing priority for the ACCC. Any business or individual that attempts to enter collusive agreements with competitors risks significant penalties.”
