The Competition Council said Friday this raises suspicions that public procurement auctions may be fixed.
The watchdog performed a comparative analysis between prices charged from authorities and non-government clients for four types of products (Euro 5 diesel fuel, cooking oil, potatoes, and photocopier paper), which revealed that prices paid by authorities under public procurement contracts are not lower than those paid by contractors’ non-government customers.
The analysis has revealed, however, that authorities and public institutions do get lower prices when public contracts are awarded online, which shows the online auction system may help save public money.
The biggest issues antitrust authorities found were in the procurement of cooking oil and potatoes, whose selling prices are higher than producer prices. Out of 18 economic operators that provided the competition watchdog with information, only one was a producer of cooking oil, while the rest were intermediaries and charged higher prices from both government and non-government customers.
The average price of cooking oil, which authorities buy to supply military units, nursing homes, penitentiaries, and child care institutions, has regularly cost at least 10% more than the producer price. Also, in the case of potatoes bought by direct negotiation, authorities paid nearly 37% more than non-government customers.
The price of potatoes was lower for public authorities by around 20% only when procurement contracts were awarded via open online auctions, the competition watchdog said.
The Competition Council calls for a closer supervision of the public procurement process, to restrict price fixing practices.