The UK faces ‘significant risks’ in procurement partnerships, CMA warns

Open the editor’s digest for free

FT editor Rula Khalaf picks her favorite stories in this weekly newsletter.

The UK government faces a “significant risk of bid rigging” by contractors, the head of the competition watchdog has warned.

Sarah Cardell, head of the Competition and Markets Authority, is trialling a new artificial intelligence-powered tool that the agency believes will help catch companies colluding when buying public contracts.

The pilot program, which uses AI to scrape large amounts of data, is part of an attempt to reduce fraud and waste in the UK’s £300bn-a-year public procurement market.

“We know procurement markets are at high risk of bid rigging,” Cardell told the Financial Times. “We now have the ability to scrutinize data, to scrutinize bid data, identify anomalies in that bid data and identify areas of anti-competitive conduct.”

A pilot program with a government department was “very successful,” she said.

CMA announced last month New tender fraud investigation Suspicious activity related to the School Improvement Fund of the Department of Education.

The agency has stated that there is reason to suspect that it has defrauded several roofing and construction service companies in order to book contracts with funds used to maintain educational buildings.

By 2023, CMA It fined 10 construction firms nearly £60 million. To rig bids to win demolition and asbestos removal contracts.

Public procurement in the UK has come under intense scrutiny in recent years after several contracts awarded in the wake of the Covid-19 pandemic raised questions about a lack of transparency and conflicts of interest between suppliers and politicians. Procurement accounts for one-third of public spending; By 2021-22 the total has reached £329bn.

A new beating regime He is ready to go to work early This year, if companies are found to have violated the competition law, they will be banned from bidding on public contracts.

“We think the program has the real potential to mobilize billions in savings into the public purse, but clearly it will increase public sector productivity, which is central to the (agency’s) growth mission,” Cardell said.

The agency was given limited powers by the previous government to prioritize growth, but has faced criticism from Sir Keir Starmer’s administration over the delivery of the measure.

The Prime Minister told a meeting of global business leaders in October that he wanted to “make sure that every regulator in this country, especially our economic and competition regulators, takes growth as seriously as the sector”.

Cardell defended the CMA’s record, saying the strategic direction laid out two years ago “supports the effective and sustained growth of the UK economy as a whole is a priority for the CMA”.

He is the keeper. It is also designed to evaluate the use of “behavior solutions”. In the year Merger decisions in 2025. Instead of forcing companies to switch businesses, such solutions use other measures – such as price cuts – to protect consumers.