CMA: Tackling 'Significant Risk of Bid-Rigging' with AI
The UK government faces mounting concerns over potential bid-rigging in public procurement.
Now, the CMA is piloting an AI tool to help detect and prevent companies from colluding when competing for public contracts.
The new tool, which uses AI to analyse large volumes of bidding data, forms part of a broader effort to address fraud and inefficiency in the UK's public procurement market.
Worth an estimated £300bn (US$371bn) annually, the sector is considered a prime target for anti-competitive practices, which inflate costs for taxpayers and undermine trust.
AI and data: Detecting collusion at scale
“We know that procurement markets are at significant risk of bid-rigging,” Sarah Cardell, Head of the Competition and Markets Authority (CMA), told the Financial Times.
The CMA’s AI-backed programme is designed to identify suspicious patterns in bidding behaviour, which may indicate collusion.
By scanning data at scale, the tool looks for anomalies that might suggest companies have conspired to manipulate bids—whether by raising prices artificially or by agreeing in advance who will win certain contracts.
The trial, which involves one government department, is already yielding positive results, according to the CMA. Sarah added that such efforts are crucial to curbing fraud and ensuring fair competition within the sector.
The issue of bid-rigging is not hypothetical. The CMA recently launched an investigation into alleged collusion between roofing and construction firms bidding for contracts tied to the Department for Education’s school improvement fund.
The fund, intended to maintain educational facilities, is the latest example of a procurement area where the CMA suspects misconduct.
Tackling procurement risks with new tools and laws
The timing of this AI trial aligns with other government efforts to modernise public procurement.
In particular, the Procurement Act 2023, which comes into effect in February 2025, introduces measures aimed at increasing transparency and combating fraudulent practices. Among its provisions is a debarment regime, allowing ministers to exclude companies found guilty of competition law violations from bidding for public contracts for up to five years.
This regulatory shift highlights the need for businesses to take proactive steps to ensure compliance.
Organisations involved in public procurement should conduct internal audits, implement monitoring systems and update their compliance programmes. Training procurement teams to recognise the implications of the new law is also essential, as is preparing for potential CMA investigations.
Fraud in public procurement is a costly issue, with estimates suggesting it costs UK taxpayers around £21bn (US$25.9bn) annually.
By leveraging AI and advanced data analysis, the CMA aims to address these losses while promoting efficiency and fairness in public spending.
CMA’s broader role in driving economic growth
The CMA’s work extends beyond bid-rigging detection.
In a recent letter to the Prime Minister, former CMA Chair Marcus Bokkerink, who was reportedly "ousted" from the position earlier today, outlined several key actions to support economic growth, including measures to enable competition in sectors critical to the UK economy and to boost innovation in digital markets.
These efforts, combined with AI-driven initiatives like the new procurement tool, demonstrate the CMA’s commitment to supporting the government’s economic agenda.
The letter highlighted five actions to advance this mission, including rooting out illegal bid-rigging and providing direct advice to help shape industrial strategy.
In the letter, Marcus stated: “The CMA is fully supportive of the government’s focus on driving economic growth and stands with you in this critical shared endeavour.”
By introducing cutting-edge technologies and implementing stricter regulations, the CMA aims to uphold competitive markets, protect public funds and contribute to a stronger UK economy.
As Sarah notes: “We’ve now got the capability to scan bidding data at scale, spot anomalies and identify areas of potential anti-competitive conduct.”
For businesses, this serves as a reminder of the importance of maintaining compliance with competition laws and preparing for heightened scrutiny in public procurement processes.
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