Bid rigging in public procurement has caught significant attention of the Serbian Competition Commission (the “Commission“) in the past year. Following several letters of complaint from the public authorities and the Republic Commission for Protection of Bidders` Rights, regarding alleged cases of bid rigging involving companies from the same undertaking, the Commission has issued an official opinion on the matter (the “Opinion”).
The Opinion first explains the concept of an undertaking in terms of the Competition Protection Act (the “Act”), being a group of entities under common control. The Commission recognized that, under the Act, bid rigging is indeed considered a restrictive agreement. However, the Commission continues by explaining that there can be no restrictive agreements between entities belonging to the same undertaking; rather, a restrictive agreement can occur only between entities belonging to different undertakings.
Therefore, the Commission concludes that under the Act (and according to the Guidelines on the applicability of Article 101 of the Treaty on the Functioning of the European Union to horizontal co-operation agreements), the Commission has no jurisdiction when it comes to bid rigging, which involves only entities from the same undertaking.
The aforementioned is not to say that all forms of bid rigging involving entities from the same undertaking are allowed under Serbian legislation, but that the tenderers and the bidders are to search for protection of their rights under mechanisms provided by the Public Procurement Act and the applicable bylaws.
By Nikola Kasagic, Senior Associate, and Rastko Pavlovic, Associate, SOG / Samardzic, Oreski & Grbovic
