Archives November 2023

BID RIGGING

A. What is Bid Rigging?

Bid rigging (or collusive tendering) occurs when competitors conspire and agree as to who will be the winning bidder. It may take the following forms, amongst others:-

i) Cover/ Complementary/ Courtesy bidding

This is the most frequent way in which bid-rigging is implemented. It occurs when competitors agree on a winner through submitting a bid that is known to be too high to be accepted or one that contains terms that are known to be unacceptable to the purchaser.

ii) Bid Suppression

It involves an agreement among competitors, for one or more of them to refrain from bidding or to withdraw a previously submitted bid so that the designated winner’s bid will be accepted.

iii) Bid Rotation

This entails various ways in which competitors agree to take turns in being the winning bidder.

iv) Market Allocation

This occurs when competitors allocate the market amongst themselves and agree not to submit bids for markets outside their allocations.

B. Prohibition of Bid Rigging

All forms of bid rigging  are prohibited. Section 2 of the Competition Act [Chapter 14:28] (theAct) defines an unfair business practice as a restrictive practice or conduct specified in the First Schedule. In terms of Section 42 of the Act, acts or omissions specified in the First Schedule are unfair business practices for the purposes of the Act. Paragraph 6 (1) of the First Schedule defines bid rigging as follows: –

“Entering into or giving effect to an agreement, arrangement or understanding, whether enforceable or not, with another person whereby—

(a)  any of the parties to the agreement, arrangement or understanding undertake not to submit a bid or tender in response to a call or request for bids or tenders; or

(b)  in response to a call or request for bids or tenders, some or all the parties to the agreement, arrangement or understanding submit bids or tenders that have been arrived at by agreement between themselves.

An exception is where the agreement, arrangement or understanding is between companies which are all part of a group of companies.

C. Anticompetitive Effects of Bid Rigging

When bidders coordinate : –

i) undermines the bidding process and results in rigged prices that are higher

Read More…

Captains of industry and commerce eye value-added exports

Story by Wellington Makonese

Ms. C. Mashava (Assistant Director – Tariffs Division)

CAPTAINS of industry and commerce have resolved to expand Zimbabwe’s regional footprint as agreements on relaxation of trade barriers take shape. 

The two-day Annual Trade- Tariff Conference came to an end this Thursday with the private sector highlighting the importance of exploring trading blocs which Zimbabwe is part of.

The resolution comes when the focus is shifting towards reaping trade relaxation gains from the African Continental Free Trade Area (AfCFTA). 

Livestock and Meat Advisory Council executive director, Dr Reneth Mano said, “We are seized with understanding agreements with the EU sector; we have seen that we are ready to exploit opportunities opened in livestock and poultry. We need to reduce transaction costs and improve competitiveness.”

“We are looking to boost intra-Africa trade, we are now expected to increase our market to 1.3 billion and increase the diversity of products that are to be traded without barriers of tariffs,” said Dairy Processors Association of Zimbabwe Secretary General, Mrs Clementine Tendayi Marecha.

The government has reaffirmed its commitment to supporting export-oriented firms.

The Ministry of Industry and Commerce assistant director in the Tariff Division, Ms Cicilia Mashava said, “Harness trade agreements, develop policies that promote exports of value-added products, exporting unprocessed minerals and value-added products hence the need to diversify. We need to tap into the new markets. Produce innovative value-added goods.”

Zimbabwe’s largest export destination is South Africa accounting for 45 percent followed by the United Arab Emirates standing at 28 percent and China at seven percent.
https://www.zbcnews.co.zw/?p=16377