The Organisation for Economic Co-operation and Development (OECD) has adopted Recommendations to Combat Cartels in Public Procurement, which call on countries to promote fair competition in procurement by reducing the risk of matched bids, facilitating the detection of cartels and promoting the enforcement of anti-cartel legislation in public procurement.

The Recommendations advise OECD Member States to address the risk of concerted practices in public procurement by promoting competition and making it more difficult to establish and maintain collusive schemes. For example, contracting authorities are advised to conduct appropriate market research before launching procurement procedures, identifying procurement needs and potential suppliers in the region and foreign markets, promoting competition by maximising the pool of potential bidders, setting transparent and non-discriminatory requirements in procurement so as not to unreasonably exclude bidders and favour incumbent service providers, as well as where possible, it is recommended that larger procurements be divided into lots to facilitate the participation of small and medium-sized enterprises, that electronic procurement systems be used at all stages of the procurement process, that reliable and comprehensive procurement databases be maintained with data on tenders submitted, contracts, that tenderers be required to provide a certificate of independent bid preparation and that they are informed of the sanctions for involvement in collusive practices. The Competition Council encourages the implementation of these Recommendations in the daily practice of contracting authorities by systematically promoting them at informational events for said authorities.

At the same time, the Recommendations encourage procuring entities to make it their duty to inform officials about prohibited agreements and to reward procurement officers who successfully identify indications of such prohibited agreements.

The Recommendations urge competition authorities to instruct contracting authorities and public administration staff to ensure that all stakeholders are aware of the characteristics of cartels and collusion schemes. This includes a strong recommendation to reinforce cooperation with other supervisory and public authorities, such as the Procurement Supervision Bureau, the Anti-Corruption Bureau, prosecutors and others, in order to raise awareness of collusion among cooperation partners and, where necessary, to identify red flags of collusion and report them to the competition authority.

"Effective collaboration with the cooperation institutions is one of the priorities of the Competition Council. Each year, the Competition Council devotes significant resources to educating its partners on the characteristics of collusive agreements. Since 2022, seven awareness-raising events have been organised for staff of cooperation institutions such as the Prevention and Combating of Corruption Bureau, the Economic Crime Directorate of the General Criminal Police Directorate, the European Public Prosecutor's Office, the Financial Intelligence Service, the Central Financial Contracts Agency and others. A successful partnership with the Office for Preventing and Combating Corruption has led to the discovery of the so-called "Construction Cartel" in 2021 and the "Road Construction Cartel" in 2023, as well as the first private contractor cartel in 2022 in cooperation with the European Public Prosecutor's Office. The Competition Council's Recommendations for the Contracting Authorities and the educational opportunities are available on the Competition Council's website," says Ieva Šmite, director of the Prohibited Agreements Department of the Competition Council.

The Competition Council's practice thus far shows that procurement cartels are the most serious and the most widespread distorter of the competitive environment in Latvia. And contractors are the first to spot similarities and suspicious coincidences in procurement. That is why the Competition Council developed a handbook for procurers in 2022, the Cartel Signal List. It provides information on the types of cartels, the characteristics of a cartel, preventive tools to identify cartels, reporting possibilities and other useful information. In addition, 12 awareness-raising seminars for procurers were organised in the first half of 2023, including the seminar series "Public Procurement: What should organisers consider?", where more than 1100 procurement professionals from national and local authorities were educated over the course of six seminars.

At the same time, the OECD recommends considering the development of automated digital tools to identify cartels in procurement, for example by automatically filtering suspicious bids according to certain characteristics in the Electronic Procurement System. The Competition Council already uses cartel screening techniques in its procurement analysis, and is continuously working within limited resources to improve its IT solutions for investigations and evidence analysis, as well as investing resources in digitising its processes, for example by introducing a digital e-file.

The OECD Recommendations require countries to impose appropriate and severe penalties for cartel membership, and encourage companies to admit wrongdoing or participate in the Leniency Programme, without barring the programme's members from participating in procurement. It should be noted that the provisions of the Public Procurement Law in Latvia have long provided for exemption from exclusion from procurement for participants in the Leniency Programme, as well as the possibility of regaining lost confidence.

The Recommendations also highlight the role of competition authorities in assessing regulatory legislation related to the regulation of the public procurement environment, for example by providing the competition authority with an advisory role to assess the impact of regulation on competition. The Competition Council is already actively involved in the review of procurement regulation and is making proposals.

The previous OECD Recommendations on cartels in public procurement was adopted in 2012. In 2023, the Recommendations have been recast and updated in light of recent national practices in fighting cartels and promoting competition, and the introduction of digital tools.