The Certificate of Independent Bid Determination (CIBD)

Fair Trading Commission
The Certificate of Independent Bid
Determination (CIBD)
Public Procurement Seminar
Wednesday 16th – 17th June 2010
Savannah Hotel, Barbados
Overview of Presentation
 What 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
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
What are the main benefits of the CIBD?
 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 activities
 Signals 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
Consequences for filing a false CIBD
 Prosecution
 For 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 conspiracies
 US v Maymead Inc. and US v Taylor & Murphy
 US v Glazier Foods Co. and John J Johnson
 Civil Damages
 Under 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
Text of the CIBD
 The CIBD certifies that
 The 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
 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
Public Procurement Seminar
June 16th – 17th 2010
The Certificate of Independent Bid
Determination (CIBD)
Fair Trading Commission
‘Good Hope’
Green Hill
St. Michael