The New South Wales (NSW) Labor government is set to collaborate with the Australian Competition and Consumer Commission (ACCC) to enhance oversight of public contracts using artificial intelligence (AI). This initiative aims to detect and deter illegal collusion among companies bidding for government tenders, particularly in the context of bid-rigging.
NSW Treasurer Daniel Mookhey will announce this new partnership on March 18, 2024, as a result of discussions held during the Commonwealth Treasurer’s Economic Reform Roundtable last month. The collaboration will leverage AI technology to analyze extensive data related to contracts, submissions, and tender information. By sharing insights with the ACCC, the government hopes to uncover suspicious patterns indicative of collusion.
According to a global study by the Organisation for Economic Co-operation and Development (OECD), enhancing competition and preventing collusion could potentially save governments approximately 20 percent on contracts. The NSW government allocates over $42 billion annually for goods, services, and construction. Identifying instances of collusion is expected to lead to better-quality projects and more efficient spending of taxpayer money.
Bid-rigging, an illegal practice where companies collude to inflate prices, can be challenging to detect. The ACCC has outlined common tactics used in such arrangements, including companies not submitting bids, offering prices above an agreed-upon threshold, or withdrawing winning bids. Suppliers found guilty of engaging in cartel conduct may face prosecution and suspension from future government contracts.
This proactive approach aims to strengthen the integrity of the tendering process and ensure that public funds are used effectively. Mookhey emphasized that the partnership with the ACCC represents a significant step in combating these unlawful practices, reinforcing the government’s commitment to fair competition in public procurement.
With the rise of technology in the public sector, the NSW government is not only seeking to deter would-be conspirators but also to foster a transparent environment that benefits both the government and its suppliers. By utilizing AI, the government aims to create a level playing field for all companies bidding for contracts, promoting healthy competition and ultimately better services for the community.
