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Unsound strategic bidding and the competition perspective

Guardado Lundqvist, André LU (2015) LAGM01 20151
Department of Law
Abstract
Public procurement represents almost 17 % of the EUs gross domestic product (GDP) which is why it is important to understand what unsound strategic bidding (UNSB) is and what the consequences could be if not prevented. Furthermore, it is often bigger companies that are willing to take the risk that comes with utilizing UNSB. If such UNSB is not prevented it will probably distort competition in the long run. At first it will probably cause the prices to get lower on the market for the contracting authorities; but, later on it will enable bigger companies to expand and acquire larger market shares and finally cause fewer players in particular markets. So the question that arises is, how can this situation be prevented? UNSB isn’t per se... (More)
Public procurement represents almost 17 % of the EUs gross domestic product (GDP) which is why it is important to understand what unsound strategic bidding (UNSB) is and what the consequences could be if not prevented. Furthermore, it is often bigger companies that are willing to take the risk that comes with utilizing UNSB. If such UNSB is not prevented it will probably distort competition in the long run. At first it will probably cause the prices to get lower on the market for the contracting authorities; but, later on it will enable bigger companies to expand and acquire larger market shares and finally cause fewer players in particular markets. So the question that arises is, how can this situation be prevented? UNSB isn’t per se illegal, at the moment. But, as this thesis will argue, competition will be distorted if UNSB is not prevented and, therefore, the legislator should overlook the interaction between competition and public procurement.
The Swedish public procurement act (LOU) is a procedural law that explains how the contracting authorities should execute a procurement procedure and there are certain remedies in order to stop certain types of the UNSB behaviour, if they become noticed. But, how can the UNSB types that are not solved by LOU be prevented? In my opinion competition law could be a solution. Competition law will discourage companies from using bid rigging and all other sorts of anti-competitive agreements that could occur under a public procurement procedure.
My opinion is that these two systems should coordinate with each other to ensure effective competition. Furthermore, it should be noted that all UNSB problems cannot be prevented, currently, under LOU and therefore there is a need to educate the personnel at the contracting authorities so as they might detect such UNSB behaviours as well as to do competition assessments. These potential remedies wouldprevent the UNSB behaviours before they occur. Notably, the remedies that are under LOU, especially those for exclusion of a supplier and rejection of abnormally low tenders, are needed to be coordinated with the provisions under competition law especially ch. 2 § 1 and 7 in the Swedish competition act in order for the prevention to be successful. (Less)
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author
Guardado Lundqvist, André LU
supervisor
organization
course
LAGM01 20151
year
type
H3 - Professional qualifications (4 Years - )
subject
keywords
EU law, civil and criminal procedure, public procurement, unsound strategic bidding
language
English
id
5434139
date added to LUP
2015-06-11 15:34:03
date last changed
2015-06-11 15:34:03
@misc{5434139,
  abstract     = {Public procurement represents almost 17 % of the EUs gross domestic product (GDP) which is why it is important to understand what unsound strategic bidding (UNSB) is and what the consequences could be if not prevented. Furthermore, it is often bigger companies that are willing to take the risk that comes with utilizing UNSB. If such UNSB is not prevented it will probably distort competition in the long run. At first it will probably cause the prices to get lower on the market for the contracting authorities; but, later on it will enable bigger companies to expand and acquire larger market shares and finally cause fewer players in particular markets. So the question that arises is, how can this situation be prevented? UNSB isn’t per se illegal, at the moment. But, as this thesis will argue, competition will be distorted if UNSB is not prevented and, therefore, the legislator should overlook the interaction between competition and public procurement.
The Swedish public procurement act (LOU) is a procedural law that explains how the contracting authorities should execute a procurement procedure and there are certain remedies in order to stop certain types of the UNSB behaviour, if they become noticed. But, how can the UNSB types that are not solved by LOU be prevented? In my opinion competition law could be a solution. Competition law will discourage companies from using bid rigging and all other sorts of anti-competitive agreements that could occur under a public procurement procedure.
My opinion is that these two systems should coordinate with each other to ensure effective competition. Furthermore, it should be noted that all UNSB problems cannot be prevented, currently, under LOU and therefore there is a need to educate the personnel at the contracting authorities so as they might detect such UNSB behaviours as well as to do competition assessments. These potential remedies wouldprevent the UNSB behaviours before they occur. Notably, the remedies that are under LOU, especially those for exclusion of a supplier and rejection of abnormally low tenders, are needed to be coordinated with the provisions under competition law especially ch. 2 § 1 and 7 in the Swedish competition act in order for the prevention to be successful.},
  author       = {Guardado Lundqvist, André},
  keyword      = {EU law,civil and criminal procedure,public procurement,unsound strategic bidding},
  language     = {eng},
  note         = {Student Paper},
  title        = {Unsound strategic bidding and the competition perspective},
  year         = {2015},
}