(e) Public procurement and tenders

Main idea: When participating in a public procurement or tender, a company has to make sure that the applicable rules of conduct are observed, including tender law regulations, competition laws and integrity in business regulations.

In any jurisdiction, when involved in a tender process, the following general principles have to be observed by any participant during the entire tender process:

  • Transparency must be maintained throughout the procurement cycle by adhering to applicable formal procedures;
  • Governmental decision makers must be provided with correct and transparent data.

Competition law requirements. The general principles of competition law in dealing with competitors are also applicable to the tender process.

Prohibitions include:

  • Discussing tender offer terms such as prices or sales conditions with competitors or other bidders;
  • Bid rigging: agreeing on an allocation of tender participation, or agreeing with competitors to participate in a tender with a mock offer;
  • Withdrawing from a public tender in exchange for compensation from a competitor;
  • Fixing the price offered by the contractor in the tender if the contractor participates in a tender process in its own name and at its own business risk;
  • Discriminating against other customers when offering low prices for a dominant product;
  • Offering dumping prices (prices below cost) when having a dominant market position.

Companies participating should:

  • Submit an offer that includes correct and transparent information and figures;
  • Autonomously decide to directly participate in a public tender;

Companies may:

  • Invite a distributor (or several distributors) to participate in a public tender without fixing or coordinating the prices offered by the distributors;
  • Give a non-binding price recommendation for the prices to be offered by the distributors;
  • Make an offer below the standard list price for a dominant product in order to be awarded a tender, provided such offer is not below cost exploitation of the licence.

Integrity in Business. Participants in a tender process may not unduly influence the tender process itself or the decision makers involved. Violations of these principles could result in severe sanctions such as exclusion from tender procedures.

It is prohibited to:

  • Illicitly influence the content of the tender documents;
  • Act as a ‘ghost writer’ for the tender documents;
  • Maintain undue contacts with the decision makers;
  • Influence tender decision makers by granting any personal advantage or gift.

It is permissible to provide:

  • Existing technical documentation upon inquiry of the tender authority;
  • Product specifications to potential customers.