International Tenders, Predetermined Winners: The Fraud Behind Global Procurement -By Fransiscus Nanga Roka

International procurement is meant to be the epitome of open competition subject matter. Governments and public entities publish tenders, companies provide bids and the best bid wins. That is the theory. In reality, too many of the global tenders are not genuine competitions. They are performances. The winning bid is more often than not known long before the bids are opened.

This is global procurements false scandal, market order disguised as bid rigging. Companies of all countries, frequently hidden behind respectable logos and apparent compliance statements quietly set prices between themselves divide territories or submit purposely weak bids to create the appearance of fairness. The public sees procedure. The cartel sees choreography.

The consequences are not technical. These are political, economic and moral. Taxpayers can pay over the odds, infrastructure quality suffers and public trust erodes when international tenders are rigged. When it comes to hospitals, cost may be too high. It might be awarded to not the firm that is cheapest on paper, but rather simply whoever conspired their way through all of it best. However, roads and ports along the global belt of silk have proved monuments to collusion rather than public service while digital systems families use both for credit card transactions are forced to record their children’s births since water networks run dry.

Bid rigging is largely seen as a competition-law issue, even among specialists and regulators. That framing is dangerously incomplete. This is not just market manipulation. This is banditry by means of a procedural mask. It siphons national budgets without the dramatic visibility of conventional corruption. It would not involve money changing hands if the bidders themselves had already agreed who should win.

That makes it all the more toxic internationally. Foreign collusion between firms from different countries uses interstices of legal systems, enforcement agencies and procurement regimes. If national interests favour it, one state may investigate, and another could delay or not even look. This is what results in impunity due to jurisdictional fragmentation. Every man for himself, which in reality means no-one-for-almost-everybody.

The myth of “competitive bidding” endures largely due to the fact that procurement systems tend to bow before form over substance. They can see whether more than one bid was placed; they may scrutinise documents for completeness and check if procedural boxes were ticked. Good paperwork does not end collusion. Sophisticated cartel behavior flourishes in the broad, deep formality, precisely because it hides under cover of technical compliance.

And lets be honest, governments do no want to look too closely. The rigged tender gives powerful domestic actors, foreign partners or politically functional timeliness the upper hand. It can provide a ribbon-cutting ceremony before Election Day. It can preserve diplomatic relationships. It can enrich intermediaries sophisticated in conducting business in the grey zone between legal and illegal. In fact, the myth of procurement neutrality is partly an act of institutional bravado.

Those are the big losers, typically citizens who will not be aware that their money was stolen right in front of them. They will simply take over overpriced energy plants, failed rail systems, crumbling bridges or surplus digital contracts. The impact, it is particularly devastating in developing countries. An additional dollar on an over-inflated procurement project means one less school, one fewer medicine, a more fragile infrastructure and narrower fiscal space for social protection. Bid rigging is a convincing white-collar cant, however it has no victimless victims. It is an outright attack on development.

Cosmetic integrity language is no liner needed, but rather a much bolder prevention and punishment architecture. By deploying data analytics to uncover abnormal bidding patterns, mandating beneficial ownership transparency when bidders join a procurement process, strengthening whistle-blower protections for reporting collusive activity and imposing debarment on firms found guilty of collusion across borders. The competitionagencies, the anti-corruption agencies and international financial institutions: theymust not operate in silos A company that is banned from one jurisdiction for bid rigging should not be permitted to do a new contract in another jurisdiction.

We must stop treating rigged procurement as an unfortunate anomaly. It is systemic fraud that exists in the world’s most respectable corners of capitalism. They can be classy conference rooms, fat contracts and legal signatures. Procurement is exciting, right up until the point that bidders privately determine an outcome before a process begins and it becomes less about governance.

It becomes organized deception.

Fransiscus Nanga Roka

Faculty of Law University 17 August 1945 Surabaya Indonesia