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The UK government faces a “significant risk of bid-rigging” by contractors, the head of the competition regulator has warned.
Sarah Cardell, head of the Competition and Markets Authority, said the agency is trialling a new AI-powered tool it believes could help catch companies colluding when bidding for public contracts.
The pilot programme, which uses artificial intelligence to collect large-scale data, is part of an attempt to reduce fraud and waste in Britain’s £300bn-a-year public procurement market.
“We know procurement markets are at significant risk of bid-rigging,” Cardell told the Financial Times. “We now have the ability to scan a lot of data, a lot of bidding data, spot anomalies in that bidding data and identify areas of potential anti-competitive behavior.”
A pilot program with one government department “has proven to be quite successful,” she said.
Last month the CMA announced a new bid-rigging investigation due to suspicious activities related to the Ministry of Education’s school improvement fund.
The agency said it had reason to suspect that several roofing and construction services companies had arranged to rig bids to secure contracts through the fund, which is used to protect educational buildings.
In 2023 CMA fined 10 construction companies nearly £60 million for rigging bids to obtain asbestos demolition and removal contracts.
Public procurement in the UK has come under intense scrutiny in recent years after a number of contracts awarded in relation to the Covid-19 pandemic raised questions about a lack of transparency and conflicts of interest between suppliers and politicians. Procurement accounts for about a third of public spending, which totaled £329 billion in 2021-22.
New exclusion regime set to take effect early this year will mean that companies will face a ban on bidding for public contracts if they are found to have violated competition law.
“We think so [the programme] got the real potential to save billions in the public purse, but it also clearly increases public sector productivity, a key component back to [agency’s] growth mission,” Cardell said.
The agency was given a special mandate by the last government to prioritize growth, but has faced criticism from Sir Keir Starmer’s administration over its delivery of metrics.
The Prime Minister told a gathering of global business leaders in October that he wanted to “ensure that every regulator in this country, especially our economic and competition regulators, takes growth as seriously as this room does”.
Cardell also defended the CMA’s results, saying its strategic direction set two years ago “made clear that supporting productive and sustainable growth across the UK economy is a priority for the CMA”.
It’s a guard dog is also willing to reconsider his use of “behavioral drugs” in merger decisions in 2025. Instead of forcing companies to go out of business, such remedies use other measures – such as price freezes – to protect consumers.
