The Certificate of Independent Bid Determination (CIBD)

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Fair Trading Commission
The Certificate of Independent Bid
Determination (CIBD)
Public Procurement Seminar
Wednesday 16th – 17th June 2010
Savannah Hotel, Barbados
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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
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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)
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 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
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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
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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
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
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Public Procurement Seminar
June 16th – 17th 2010
The Certificate of Independent Bid
Determination (CIBD)
Fair Trading Commission
‘Good Hope’
Green Hill
St. Michael
[email protected]
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