IPPC6

1. SandeepVerma,2014
Collaborative Public Procurement:
A Quick Comparison of the Indian Position
with International Practices on Pooled Procurement
from Competition Law Perspectives
6th IPPC
:: DCU, Dublin :: August 15, 2014 ::
Sandeep Verma
sverma@rajasthan.gov.in
SSRN Author Page: http://ssrn.com/AuthorID=1090557
www.BuyLawsIndia.com

2. But First, the Fine Print:
 Views expressed herein are the personal and
academic views of the Author alone; and do not
reflect the official position or policy of the UIDAI, the
Government of India, or any of her Departments or
Agencies.
 Sandeep Verma is speaking in his personal capacity,
and not as a Representative of the UIDAI, the
Government of India, or any of her Departments or
Agencies.
SandeepVerma,2014

3. Combinatorial PP Arrangements:
Where do We find them?
 Drugs Procurement in the Public Sector
 Municipal Services Acquisition
 PPPs in Infrastructure and Services’ Provisioning
 Defence Acquisitions and R&D through
Collaboration
 Other Strategic Procurements, esp. Crude Oil and
Gas
 Many Routine Procurements, almost Everywhere…
SandeepVerma,2014

4. Combinatorial PP:
Varying Nature of Collaboration
 “Direct” or “Hard” Collaboration
 Demand Agglomeration
 Bundling
 Bundling of Related Contracts
 Bundling of Unrelated Contracts
 “Indirect” or “Soft” Collaboration
 Framework Agreements
 Standardisation
 Mandatory Technical Standards
 Inter-operability Standards
 Combinations of Both “Hard” and “Soft” Forms of
Collaboration
SandeepVerma,2014

5. Combinatorial PP:
Many Reasons for Collaboration
 Economy of Scale
 Contract Efficiency—Free Riders
 Overall Economy of Contracting
 Attracting Quality
 Attracting Competition
 Standardisation and Inter-operability
 Leveraging Contract Volumes and Contract Values
 But
 Supporting National or Local Discrimination
 Buyer Cartels (State-sponsored and Otherwise)
SandeepVerma,2014

6. Collaborative PP:
Institutional Collaboration in
Multiple Formats
 Centralised Procurement Agency
 Nominated Procurement Agency amongst Distinct
Legal Entities
 SPV for Distinct Legal Entities
 (Lead) Framework Setting Agency
 Both Permanent & Temporary Forms
SandeepVerma,2014

7. SandeepVerma,2014
Collaborative PP under
Different National Jurisdictions

8. Collaborative PP in the US:
 Procurement Guidance under FAR
 Inter-Agency Acquisitions
 Direct Acquisitions, e.g., IDIQs
 Assisted Acquisitions
 Unbundling Requirements
 FTC & DOJ Guidelines on Collaboration amongst
Competitors (2000)
 JPAs to be addressed thru a “Rule of Reason” Approach
 Safety Zones in Relevant Output and Input Markets
 DoJ Business Review Letters in STARS Alliance Case
(2013)
SandeepVerma,2014

9. Collaborative PP in the EU:
 Procurement Guidance
 Use of Other Agency Frameworks
 Pooling of Requirements
 Thru CPBs and Other Institutional Arrangements
 Treaty of the Functioning of the EU (2010)
 Prohibition on Agreements enabling Direct or Indirect
fixing of Purchase Prices
 But EUHC Guidelines (2011); Part 5: Co-operative PAgs
 Both Horizontal and Vertical Analysis Required
 Safety Zones: 15% shares in markets
 Rule of Reason Approach to be followed
SandeepVerma,2014

10. Collaborative PP in China:
 Collaborative PP Permitted?
 Anti-Monopoly Law prohibits relevant agreements
 Adopts a “Per Se” Rule on JPA Prohibition
SandeepVerma,2014

11. Collaborative PP:
Lessons from Int’l Best Practices
 “Rule of Reason” Analysis, rather than “Per Se”
Prohibition
 Permit JPAs amongst smaller competitors
 Safe Harbour Limits
 Arms-Length between Purchasing Agency and
Competing Collaborators
 But Limited/ No Guidance on Interaction of Public
Procurement Actions with Competition Law Issues
SandeepVerma,2014

12. Collaborative PP in India:
 Procurement Rules allow procurement thru a CPO
 Rate Contracts
 Some guidance seems to prohibit Inter-Agency
Contracting
 Recent cases of (Mega) Collaborative Procurement
 Bank ATMs by public sector Banks
 Ethanol Blending by State Oil Marketing Agencies
SandeepVerma,2014

13. Collaborative PP in India:
Unpacking Legal Positions
 Competition Law
 Largely “Per Se” Prohibitions on Horizontal Collaboration
 But, procurement thru JVs under “Rule of Reason”
 JPAs allowing Vertical Cooperation under a “Rule of
Reason” approach
 Competition Case Law
 Regulator adopted “Rule of Reason” in both cases
 Delays by Regulator as an alibi for continuing JPAs
 Undertaking amongst collaborators deemed sufficient
 Comparisons with Int’l Best Practices
SandeepVerma,2014

14. Collaborative PP:
Recommendations and Conclusions
 Need for Explicit Guidance in certain Jurisdictions
for blending Procurement and Anti-Trust Guidance
 “Rule of Reason” or “Per Se”?
 Additional Research Possibilities
 Collaborations for National Discrimination and as Barrier
to Entry
 State Cartels
 International Cooperation in Cartel Prevention
SandeepVerma,2014

15.  Thank You
www.BuyLawsIndia.com
SandeepVerma,2014