Collusion occurs in public tenders and bids (for simplicity, the term tenders is used to refer to both tenders and bids) when establishments - presumed to be competitors - secretly agree to increase the prices of goods or services or reduce their quality for the buyer seeking to obtain them through the tenders, by dividing the tenders among themselves or engaging in fictitious competition to allow one of them to benefit from the project periodically or by agreeing to share the performance of the project without providing a solidarity document between the establishments. Governmental and private entities often rely on competitive tenders to obtain the best offer (financial value), as lower prices and/or better products are desirable because they lead to resource savings and make them available for use in other products or services. The competitive process can achieve lower prices and better quality if establishments genuinely compete (by setting competition conditions honestly and independently), and collusive practices cause significant harm in the field of public tenders. Such agreements and collusion among bidders do not achieve market fairness, consume resources from buyers, limit public trust in the competitive process, and undermine the benefits resulting from market competition.

Collusion in tenders is considered an illegal practice in the Kingdom of Saudi Arabia, as it is in most countries worldwide, and these practices can be investigated and penalties imposed under the Competition Law.

This document aims to provide general guidelines to combat collusion among bidders in public tenders. The target groups for this document are employees in departments related to contracts, tenders, and procurement, in addition to members of bid opening committees and bid evaluation committees in governmental entities (and private entities that issue tenders), as well as specialists involved in preparing tenders and their technical conditions.

It should be noted that this document cannot be relied upon for any legal purpose, and if there is any conflict between its content and any systems, laws, or executive regulations, especially the Government Tenders and Procurement Law, the Competition Law, and their executive regulations, the original reference shall be those systems and regulations.

The business sector by its nature is a dynamic and active sector, with many variables affecting business performance. The following are some practices that may appear to involve suspicion of collusion but are otherwise:

A- Joint application for a competition:

Depending on the nature of some competitions, their requirements may be diverse and heterogeneous. We find that some establishments cannot apply individually due to a lack of expertise and capabilities, so they look for another establishment to cover this deficiency and apply jointly and clearly. The reason may be the size of the project or its geographical diversity. As long as there are clear and convincing reasons for joint application to the competition, it is further from collusion.

B- Holding regular and announced meetings for employees in a specific sector:

The nature of commercial relations often requires regular meetings to coordinate among employees in a specific sector in various fields, including:

• - Discussing the obstacles they face with some new laws and procedures.

• - Agreeing on collective purchasing from outside the Kingdom to obtain better prices.

• - Organizing conferences and exhibitions related to them.

• - Conducting studies and research related to the obstacles they face to explore ways to solve them.

To remove suspicions about these meetings, it is advisable that they be announced, include all employees in the sector, and that no illegal topics are discussed such as:

• - Setting prices, or their minimum or maximum limits.

• - Methods of applying for competitions.

• - Market division.

An invitation can also be extended to the General Authority for Competition to attend these meetings with a representative to ensure that these establishments do not engage in prohibited practices under the law.