Public Procurement SeminarWednesday 16th – 17th June 2010

Savannah Hotel, Barbados

The Certificate of Independent Bid Determination (CIBD)

Fair Trading Commission

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Overview of PresentationWhat is a CIBD?

What are the main benefits of the CIBD?

Consequences for Parties Filing a False CIBD

Example of Breaches of the CIBD

Text of the CIBD

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What is a CIBD?A document which requires bidders to disclose, to the

tendering authority, all material facts regarding any communications and arrangements between the bidder and its competitors in respect of a specific call for tenders

The document is signed under oath

This signed document is mandatory and is submitted with each bid confirming that the bidder

Has not agreed with its competitors about bids. Has not knowingly disclosed bid prices to any of its competitors. Has not attempted to convince competitors to rig bids.

Used in many countries (e.g. Australia, Canada, New Zealand, UK, USA)Brazil is the latest case in which the CIBD is mandatory

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Helps governments to better manage the procurement process

Allows for the implementation of more efficient procurement strategies

The CIBD acts as a deterrent to bid rigging activitiesSignals to bidders that the procurement agency is monitoring the

bid process for any signs of collusion

It is potentially easier to prosecute / impose sanctions on bid riggers

Additional penalties can be imposed for the filing of a false statement (independently of any prosecution of cartel behaviour)

Prosecution of a firm that attempts to bid rig is possible Can be used as leverage to encourage firms to cooperate with

authorities in return for not charging them with lying on the CIBD, or for more lenient sentencing

What are the main benefits of the CIBD?

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ProsecutionFor making a false statement Issuing a false statement to

government is a serious offense Penalties are often harsh Example: US, Canada (fines, imprisonment)

For forgery & perjury (e.g. Under the Canadian Criminal Code) For breaking national laws regarding cartel behaviour or bid

rigging conspiraciesUS v Maymead Inc. and US v Taylor & MurphyUS v Glazier Foods Co. and John J Johnson

Civil DamagesUnder contract law for breach of a contractual term (e.g.

Australia)Government Sanctions

Suspension / Disqualification from submitting future bids for government contracts

Duration of suspension/disqualification may be at the discretion of the procurement agency or other government agency

Consequences for filing a false CIBD

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The CIBD certifies thatThe prices in the bid have been arrived at independently. The prices in the bid have not been, and will not be

knowingly disclosed by the bidder to any other bidder/competitor before bid opening or contract award.

No attempt has been made or will be made by the bidder to induce any other concern to submit or not to submit an offer for the purpose of restricting competition

The FTC will explore the introduction of the CIBD as a legal document in the procurement process.

Failure to submit the CIBD will result in the disqualification of the tender, quotation, or bid.

Procurement agencies will be encouraged to use the CIBD

The text in the CIBD for Barbados draws heavily on that from Canada

Text of the CIBD

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Fair Trading Commission‘Good Hope’Green HillSt. Michael

info@ftc.gov.bb

The Certificate of Independent Bid Determination (CIBD)

Public Procurement SeminarJune 16th – 17th 2010

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