24 March 2015
The Competition and Consumer Protection Commission (CCPC, formerly the Competition Authority) has issued a guide for Small and Medium Enterprises (SMEs) wishing to make joint bids for public contracts. The aim of the guide is to advise businesses, especially SMEs, on how to comply with competition law when tendering as part of a consortium.
The guide is based on Irish and EU legislation and guidelines and contains general background information on SME participation in consortium bidding in Ireland, an overview of the application of competition law to consortia, and practical guidance for SMEs (including case studies).
There are a number of valid, pro-competitive reasons for making a consortium bid. For example, individual firms may not have the necessary scale, experience or financial resources to meet the minimum service requirements of the tender. However, consortium bidding may be anti-competitive where it involves competitor collusion or the sharing of commercially sensitive information. As a result, consortium bidding is only permissible under certain conditions and the CCPC guide aims to provide greater clarity in this regard.
The circumstances in which a consortium bid will not breach competition law are set out in the guide but in all other cases consortium members must carry out a self-assessment of their compliance with competition law. The guide focuses on consortia involving actual or potential competitors (as these are more likely to raise competition law concerns) but also covers consortium bids by non-competitors operating in different product or geographic markets. The guide cautions against using sub-contractors as conduits for exchanging sensitive information.
The CCPC guide is one of a number of recent measures put in place at national and EU level designed to make public contracts more accessible to SMEs, which is important given the significance of the public sector in the economy.
The Guide for SMEs, ‘How to comply with competition law when tendering as part of a consortium’ is available here.