UK at High Risk of Bid-Rigging in Public Contracts, Competition Watchdog Warns

1. The Warning from the Watchdog

The UK is at high risk of collusion in public procurement, the Competition and Markets Authority (CMA) has warned. The watchdog said that billions of pounds in government spending could be exposed to coordinated bidding practices that undermine fair competition.

The CMA identified sectors such as construction, facilities management, and infrastructure projects as particularly vulnerable. With the government increasing investment in public infrastructure, the authority warned that collusion could significantly inflate costs and reduce value for taxpayers.

2. How Bid-Rigging Happens

Bid-rigging occurs when companies agree in advance who will win a tender or coordinate pricing to make bids appear competitive. While illegal under UK law, collusion is often difficult to detect because it can mimic normal bidding behavior.

The CMA emphasized that such practices not only increase costs but also discourage smaller or newer companies from participating. This can limit innovation, reduce market competition, and create long-term inefficiencies in public procurement.

3. New Detection Tools

To address the threat, the CMA has developed digital tools using data analytics to detect suspicious bidding patterns. These tools look for anomalies such as repetitive bid rotations, identical pricing, and contracts consistently won by a small group of firms.

The authority is also working with government procurement teams to implement early warning systems and train officials to recognize signs of collusion. Whistleblowers are encouraged to report information confidentially, and the CMA said they could receive protections and leniency.

4. Past Cases and Lessons

Previous investigations show that collusion is a persistent problem. In 2023, ten construction firms were fined £60 million for manipulating demolition contracts. These cases revealed that some companies had coordinated bids to give the appearance of competition while ensuring pre-determined outcomes.

The CMA said lessons from such cases have informed its preventive measures, including better data sharing and AI-based monitoring to detect potential collusion before contracts are awarded.

5. Changes Under the Procurement Act 2023

The warning comes as the UK prepares to implement the Procurement Act 2023, which modernizes the public contracting framework. The Act introduces stricter transparency rules, centralized supplier registers, and tougher penalties for companies found guilty of bid-rigging.

The CMA cautioned, however, that reforms alone will not eliminate risk. Effective monitoring, training of procurement officers, and early detection systems remain critical to prevent collusive behavior.

6. Economic and Governance Implications

Unchecked bid-rigging could undermine public trust and reduce the efficiency of government spending. Inflated costs mean less funding is available for essential services and infrastructure projects.

Collusion also gives an unfair advantage to a small number of firms, limiting opportunities for fair competition. Experts stress that open and transparent bidding is essential to ensure value for taxpayers, support local businesses, and promote economic growth.

7. CMA’s Next Steps

The CMA plans to continue prioritizing enforcement and guidance to public bodies. Sector-specific advice and data-sharing initiatives are expected to strengthen oversight. The watchdog has warned that companies caught colluding could face heavy fines, and directors involved may be prosecuted.

Firms are encouraged to implement internal compliance programs to avoid participation in illegal coordination, and procurement teams are urged to monitor contracts closely to detect irregularities early.

8. Conclusion

The CMA’s warning highlights the importance of competitive integrity in public procurement. While new laws and tools provide mechanisms for detection, the UK’s success in preventing bid-rigging depends on vigilance, cooperation, and timely enforcement.

Ensuring fair competition is central to protecting taxpayer money and maintaining public confidence in government projects. The coming months will test how effectively authorities can prevent collusion and safeguard the integrity of public procurement proces