Media > Newsletters > Competition Matters > August 2013 > From the Attorney General: Why Competition Matters
From the Attorney General: Why Competition Matters
As public servants, we are called upon every day to do more with less and to get the most value possible for taxpayers’ dollars. Competition is one of our most effective tools in achieving these goals.
When a vendor knows its competitors are vying to take on the same project or sell the same product or service to a public entity, it knows it has to bring its best bid to the table or go home empty-handed. The pressure of competition pushes prices down and encourages vendors to keep quality, service, selection, and safety high.
But what happens when a few unscrupulous vendors decide to work together instead of competing? Deals can result, such as a vendor agreeing to give up one region in return for another vendor’s pledge not to compete somewhere else. With the pressure of competition gone, both vendors can raise their prices and know they will not be underbid.
This is an example of collusion — a conspiracy or other agreement among vendors that establishes the amounts they will bid, whether they will bid, which vendor will win, or any other aspect of doing business. In a competitive market, vendors should make these decisions independently, without conferring or agreeing with one another.
To help Ohio public officials better recognize collusion and get the best value for the public funds they oversee, we have developed this Competition Matters newsletter, to be published three times a year. It contains information about competitive purchasing and the schemes that threaten to undermine it and provides tips for safeguarding your purchasing process. It also will acquaint you with the tools my office provides to deter, detect, and address anti-competitive practices of which your public entity might be a victim.
Those tools include our new bid-rigging hotline and webpage, through which you can share information — anonymously or not — to make my office aware of suspected collusion. We also offer the Partnership for Competitive Purchasing, a free, voluntary program through which members of my staff trained in bid-rigging detection select a registered entity twice a year for an on-site review of bid records for pre-selected products or services. If we detect evidence that vendors may have colluded, we may open an investigation and possibly recover funds that can be returned to your coffers.
I hope you find this newsletter helpful and pass it along to others in your office. Also, please consider registering for the Partnership for Competitive Purchasing and reporting suspicious activity through our bid-rigging hotline or webpage.
Because, quite simply, competition matters.
Very respectfully yours,
Ohio Attorney General