- Which legislation regulates: (i) the bidding process; and (ii) bid rigging in your country? Please provide brief details.
- What sanctions are envisaged for bid rigging and which authority can impose these? Can the awarded contract be considered null and void? Can bidders be excluded from the process and at which stage and under what circumstances?
- Can a decision by your national competition authority (NCA) finding an infringement (for bid rigging or any other cause) result in a tender ban (i.e. exclusion for future bidding processes)? If yes, what is the duration of the tender ban and when does it start (e.g. does it start even if the NCA decision is challenged before a court)? Is there a possibility to be exempted from the tender ban before the expiry of its full duration (e.g. self-cleaning) and under what circumstances?
- Are there any guidelines from your national competition authority (NCA) for combatting bid rigging? Are there any guidelines on lawful joint bidding/consortia in the tender process? Please provide brief details.
- How many bid rigging proceedings were opened from 2020 to 2022? How many bid rigging decisions were issued from 2020 to 2022?
- What is the percentage of bid rigging cases to the overall number of cartel cases in each year from 2020 to 2022?
- What is the total amount of fines imposed for bid rigging in each year from 2020 to 2022?
- Does leniency happen in bid rigging cases in your country?
- Is there criminal liability for bid rigging in your country?
- Is bid rigging an enforcement priority for the NCA in your country?
- Which sectors are mostly affected by bid-rigging investigations in your country in the last ten years?
- Any other interesting information/statistics/cases concerning bid rigging.
jurisdiction
1.Which legislation regulates: (i) the bidding process; and (ii) bid rigging in your country? Please provide brief details.
The bidding process is regulated by Act No. 134/2016 Coll., on Public Procurement, as amended.
Bid rigging as a form of prohibited horizontal cartel is regulated by Act No. 134/2001 Coll., on the Protection of Competition, as amended.
Criminal liability for bid rigging is regulated by Act No. 40/2009 Coll., the Criminal Code, as amended, and regarding legal entities also by Act No. 418/2011 Coll., on Criminal Liability of Legal Entities, as amended.
2. What sanctions are envisaged for bid rigging and which authority can impose these? Can the awarded contract be considered null and void? Can bidders be excluded from the process and at which stage and under what circumstances?
Sanctions
The National Competition Authority (the “NCA”) can impose a fine on the supplier involved in bid rigging of up to 10% of the annual turnover of the entire group of companies to which the supplier belongs. The NCA may also prohibit the supplier from participating in public procurement procedures (see more details under answer 3 below).
Criminal sanctions can also be imposed on companies and individuals involved in bid rigging if the relevant illegal act amounts to a criminal offence under the Criminal Code. Individuals can be sanctioned by imprisonment and a tender ban by the criminal court. Regarding companies, the criminal court can impose financial penalties, prohibition to perform public contracts and participate in public tenders for from one to 20 years, publication of the court decision, or even sequestration of property or liquidation of the company (in the most severe cases).
In addition, entities which have suffered damage as a result of a supplier’s the illegal conduct may seek damages in civil proceedings (particularly contracting authorities).
Nullity of the awarded public contract and exclusion from the public tender
The awarded public contract cannot generally be considered null and void solely because it was proven that the relevant public procurement procedure, including the selection of the preferred bidder, was affected by bid rigging.
However, the contracting authority can exclude a bidder from the public procurement procedure if there are reasonable grounds to suspect that the bidder is a party to a bid rigging agreement. If the contracting authority concludes the public contract and only later finds out that the preferred bidder was a party to a bid rigging agreement, it can terminate the awarded public contract.
3. Can a decision by your national competition authority (NCA) finding an infringement (for bid rigging or any other cause) result in a tender ban (i.e. exclusion for future bidding processes)? If yes, what is the duration of the tender ban and when does it start (e.g. does it start even if the NCA decision is challenged before a court)? Is there a possibility to be exempted from the tender ban before the expiry of its full duration (e.g. self-cleaning) and under what circumstances?
The NCA can impose a tender ban (i.e., a prohibition to participate in public procurement procedures) for bid rigging.
The period for which a tender ban is imposed begins on the date on which the decision imposing the prohibition enters into legal force (i.e., becomes non-appealable).
It is in principle not possible to be exempted from the tender ban imposed in a final decision of the NCA before the expiry of its full duration.
4. Are there any guidelines from your national competition authority (NCA) for combatting bid rigging? Are there any guidelines on lawful joint bidding/consortia in the tender process? Please provide brief details.
Yes. The NCA published the following materials related to bid rigging: Dawn Raids and Bid Rigging, Bid Rigging (“Procurement Cartel”), Bid Rigging: A Prohibited Agreement on Manipulation of Tenders, and Public Procurement and Prohibited Agreements of Suppliers.
In addition, the NCA publishes basic information about bid rigging on its website, including on sectors and markets susceptible to bid rigging, the implications and risks of bid rigging, the forms of bid rigging and major decisions related to bid rigging.
The NCA has not issued any guidelines dealing specifically with lawful joint bidding/consortia in the tender process.
5. How many bid rigging proceedings were opened from 2020 to 2022? How many bid rigging decisions were issued from 2020 to 2022?
The NCA does not specifically publish the number of bid rigging proceedings opened in a year.
The NCA also does not announce the number of cartel decisions that focused specifically on bid rigging.
However, the NCA does publish the total number of cartel decisions and describes the facts of the most significant ones in its annual reports. Based on the annual reports:
- In 2021, the NCA issued six horizontal cartel decisions in total, all of which concerned bid rigging;
- in 2020, the total number of issued cartel decisions was 11, and at least three of these concerned bid rigging.
No data for 2022 is available as of the date of this publication.
6. What is the percentage of bid rigging cases to the overall number of cartel cases in each year from 2020 to 2022?
Based on the information above, we estimate that the percentage of bid rigging cases to the overall number of horizontal cartel cases can reach over 50%.
7. What is the total amount of fines imposed for bid rigging in each year from 2020 to 2022?
N/A
8. Does leniency happen in bid rigging cases in your country?
Yes.
9. Is there criminal liability for bid rigging in your country?
Yes (see answer 2 for details).
10. Is bid rigging an enforcement priority for the NCA in your country?
According to the 2020 Annual Report, the enforcement of bid rigging cases has been a long-term priority for the NCA, which is using synergies stemming from the fact that in the Czech Republic, the NCA is competent not only in the area of protection of competition, but also public procurement in general.
The 2021 Annual Report does not expressly mention bid rigging as an enforcement priority. Based on the ratio of bid rigging cases (see answer 5 above), however, bid rigging seems to be continuously at the centre of NCA’s attention.
11. Which sectors are mostly affected by bid-rigging investigations in your country in the last ten years?
Based on the number of issued decisions, the sector which has been most affected by bid rigging investigations in the last ten years seems to be the construction sector. Other affected sectors vary and include IT, logistics and transportation or medical devices.
12. Any other interesting information/statistics/cases concerning bid rigging.
For the first time, the NCA imposed a prohibition to participate in public procurement procedures in 2021 as a sanction for bid rigging. The sanctioned company is active in the transport and logistics sector and it was, according to the NCA, involved in bid rigging in two public procurement procedures concerning the selection of a parcel carrier by the Czech Railway Administration.
In 2022, a criminal court issued a prohibition to perform public contracts and participate in public tenders for three years on the largest Czech construction company in connection with bid rigging cases.
