This presentation by Ms. Jyoti Jindgar Bhanot was made at the workshop on Competition in Publicly Funded Markets (28 February 2019). Find out more at http://www.oecd.org/daf/competition/workshop-on-competition-in-publicly-funded-markets.htm

1. COMPETITION COMMISSION OF INDIA
Ensuring Effective Competition in public
procurement-Ways and challenges before Indian
Competition Authority.
Ms. Jyoti Jindgar Bhanot, Advisor
Competition Commission of India
Disclaimer: The views and opinions expressed in this presentation are personal and do not
reflect the official policy or position of the Commission.

2. COMPETITION COMMISSION OF INDIA
 Background
 Indian Experience of Competition issues in Public Procurement
◦ Legal & Regulatory Framework
◦ Challenges faced
◦ Steps Taken
 The way Forward
◦ Diagnostic tool
◦ Digital Software
◦ Advocacy initiatives
Outline

3. COMPETITION COMMISSION OF INDIA
3
About Competition Commission of India
 Commission is the expert body established under the
Competition Act, 2002 to:
◦ prevent practices having adverse effect on competition in India,
◦ promote and sustain competition in markets in India,
◦ protect the interests of consumers and ensure freedom of trade carried on by other
participants in markets in India
 Enforcement areas:
◦ Prohibition of Anti-competitive Agreement (Section 3)
◦ Prohibition of Abuse of Dominant position (Section 4)
◦ Regulation of Mergers and Acquisitions (Section 5 & 6)
(Provisions relating to anti-competitive agreement and abuse of dominant position
notified w.e.f May 2009 and the provisions relating to M&A were notified w.e.f. June
2011.)
 Advocacy functions [Section 49]

4. COMPETITION COMMISSION OF INDIA
 Public procurement is a process through which the public
authorities acquire resources from outside suppliers either for its
own consumption or for other purposes.
 Objectives:
i. Right Price: value for money – fair and transparent.
ii. Right Source: promoting domestic capacity of suppliers - equality of
opportunity – level playing field - widen supplier base
iii. Right Quality: higher quality and technology
iv. Competition is critical to protect integrity of public procurement
process.
About Public procurement.

5. COMPETITION COMMISSION OF INDIA
Indian Perspective - Dimensions
Govt is directly and indirectly engaged in delivery of goods and
services in various sectors such as Health, Education,
transportation, Communication, Defence etc
Public procurement is carried out by various ministries,
departments, municipal and local bodies, statutory corporations
and public undertakings both at the centre and state level
Role of public procurement is key and overarching in ensuring
efficient delivery
Involves expenditure of large sums of public money - estimated
to be about 30% of GDP
Has the potential to impact structure and functioning of
market

6. COMPETITION COMMISSION OF INDIA
I – Statutory Framework The Constitution of India
Indian Contract Act, 1872; Sale of Goods Act, 1930 and
Mercantile Laws
Laws relevant to Public Procurement (Right To
Information Act, 2005; The Micro, Small and Medium
Enterprises Development Act, 2006; Prevention of
Corruption Act, 1988)
II – Rules and Regulations General Financial Rules, 2017
Delegation of Financial Power Rules
Any other financial, vigilance, security, safety, counter-
trade and other regulatory aspects; orders and
guidelines of the Government on the subject of Public
Procurement
III –Ministry of Finance’s Manuals Ministry of Finance’s Manual of Policies and Procedures
for the Procurement of Good/Works and Consultancy
Services (including non-consultancy services).
IV – Procuring Entities’ Codes/ Manuals and
Standard Bidding Documents
More Comprehensive and detailed Codes and Manuals
for Public Procurement for various categories issued by
‘Procuring Entities’ for their own use
Standard Bidding Documents for Procurement of
Goods/Works/ Consultancy Services etc.
V. Government e-Marketplace , Department of
Commerce, Ministry of Commerce and Industries
GeM provides the tools of e-bidding, reverse e-auction
and demand aggregation to facilitate the government
users, achieve the best value for their money.
Indian Regulatory Framework

7. COMPETITION COMMISSION OF INDIA
 3 –Cs :
◦ Central Vigilance Commission (CVC)
◦ Comptroller and Auditor General (CAG)
◦ Competition Commission of India (CCI)
 CVC : Issues guidelines and instructions to curb corruption in PPS
– SOP issued by all Govt. Departments and PSUs
 CAG : Monitors the deficiency and violations in the procedures and
mechanism of PPS
 CCI : Regulates competition in PPS – prevents and punishes anti
competitive conduct or practices by bidders.
Authorities : Regulators (India)

8. COMPETITION COMMISSION OF INDIA
Under the Indian Market-
Structural and Behavioural factors
 Inefficient bid systems/designs from procurers’ side; and
 Tender conditions conducive to cartelization;
 Disproportionate entry barriers in form of eligibility criteria;
such as RDSO approved vendors only for railways.
 Limited market :Little or no entry for new players in the market.
 Little or no technological change.
 Repetitive bidding.
 Identical or simple products or services.
 Few, if any substitutes.
 Collusion from the suppliers side
Factors conducive for Bid Rigging

9. COMPETITION COMMISSION OF INDIA
Enforcement Route
 Identify and correct bid rigging through strict enforcement of law.
By increasing bid rigging detection rate and heavily punishing to
create deterrence.
Advocacy Route
 Promote a culture of competition compliance amongst all
stakeholders including Central and State Govt, Business
Enterprises, Consumers, Associations
 Provide Guidance and Support
Steps Taken to make public procurement
competitive

10. COMPETITION COMMISSION OF INDIA
Outreach programs have been useful in following ways
 help competition and public procurement officials to develop closer
working relationship.
 Help educate procurement officials about what they should look for
in order to detect bid rigging through actual examples
 Train procurement officials to collect evidence that can be used to
prosecute better and effectively bid rigging conduct
 Sensitize them to design the tender process to facilitate competition
and make it less prone to bid rigging
 Make them aware about cost of bid rigging o the government and
ultimately tax payers
Benefits observed

11. COMPETITION COMMISSION OF INDIA
The Way Forward

12. COMPETITION COMMISSION OF INDIA
 It is a self-assessment exercise that enables the officer dealing with
procurement to analyse the procurement process based on past
data/information available.
 Consists of sets of questions regarding each stage of procurement
process i.e. planning, design, selection, execution and monitoring.
 Based on such answers, tool guides to identify possible gaps in the
procurement process from a competition point of view, following
which appropriate steps for improvement will be suggested
 Describes a range of methods for detecting suspicious conduct, to
deal with it internally and to also file a reference with the CCI.
1
Diagnostic Tool

13. COMPETITION COMMISSION OF INDIA
 To enable a robust procurement system in government
organizations.
 To design tenders that results in value for money.
 To detect anti-competitive practices at an early stage.
 To refer cases of bid-rigging to the Commission.
Purpose of using the Diagnostic Tool

14. COMPETITION COMMISSION OF INDIA
Collaboration with GeM
The Commission has signed an MoU with the Government e-
Marketplace(GeM):
 GeM is a state-of-the-art public procurement platform that has
used technology to remove entry barriers for bonafide sellers and
has created a vibrant e-marketplace with a wide range of goods
and services.
 The Commission and GeM will share information, intelligence and
pool knowledge and expertise as appropriate and as needed to
devise tools to detect anti-competitive practices in the digital
market.

15. COMPETITION COMMISSION OF INDIA
Development of Digital Software
The Commission is exploring developing Digital Screen based
cartel detection system in collaboration with GeM
 A screen is an economic, statistical or behavioural detection tool
for identifiable anti-competitive behaviour.
 By using data points such as prices production details, bids ,
Market shares etc, screens serve to identify patterns indicative of
anticompetitive behaviour.
 These can thus generate warning signals for taking corrective
steps and if required reference for further investigation.

16. COMPETITION COMMISSION OF INDIA
Other Advocacy initiatives
Efforts being made to promote culture of compliance amongst all
stakeholders
Advocacy programs done through out the year
To increase effective outreach out , the Commission a series of Road-
shows being organised with special emphasis on Public Procurement.
The response has been overwhelming and the Commission aims to
organise more in future.

17. COMPETITION COMMISSION OF INDIA
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