Taking the pulse of public procurement in Spain

Every year, the Independent Office for the Regulation and Supervision of Public Procurement (Oficina Independiente de Regulación y Supervisión de la Contratación, OIReScon) publishes a comprehensive report analysing the evolution and state of health of public procurement in Spain, in accordance with art. 332.9 of Law 9/2007 on Public Sector Contracts.

These annual oversight reports (informes anuales de supervision, IAS) are a crucial tool for ensuring transparency, integrity and efficiency in public procurement processes, providing a detailed overview of trends, challenges and progress. They not only assess compliance with current regulations, but also identify areas for improvement and provide recommendations for strengthening mechanisms to prevent and detect irregularities.

The IAS for the year 2023 has already been published and is divided into four modules However, we will focus on those dealing with collusive practices and preventing and combating corruption in public procurement.

In the words of the report itself, "the existence of effective competition between operators in a market leads to an increase in social welfare by leading to more efficient allocations of resources, contributing to lower prices and higher quality products and services".

Collusive practices continue to increase

Collusive practices are legally defined as "any collective agreement, decision or recommendation, or concerted or consciously parallel practice, which has as its object, has or may have the effect of preventing, restricting or distorting competition...".

In the light of the information provided by the National Markets and Competition Commission (Comisión Nacional de los Mercados y la Competencia, CNMC) and the regional competition bodies, the report draws the following conclusions:

• The data corroborate the trend in the increasing number of requests for reports and communications or complaints of alleged anti-competitive or collusive practices, particularly those coming from contracting authorities.
• The results point to greater training and awareness among the agents involved in public procurement and indicate the maturity achieved by the competition defence mechanisms that have been implemented.
• Certain economic sectors are more affected by these practices, highlighting passenger land transport, those related to concessions of catering services and similar activities in public spaces, and those related to the construction of roads and railways, bridges and tunnels.
• The most frequent collusive practices are bid-rigging and bid allocation agreements, which shows that it is this phase of the tendering process that is most sensitive to the occurrence of anti-competitive or collusive practices.

On the other hand, and based on the conclusions drawn, OIReScon points out that there is still some way to go and recommends:

• Maintain training activities in competition defence across all phases of the public procurement cycle, especially for members of the procurement units, and extend them to new recruits. In addition, it highlights the importance of continuing the training efforts for competition authorities. 
• Strengthen the advisory role of the competition authorities by ensuring they are adequately staffed.
• Finally, it is suggested that AI tools be widely used as a support instrument in the detection of anti-competitive and collusive practices in public procurement, with direct reference to the CNMC's Artificial Intelligence tool, "BRAVA" (Bid Rigging Algorithm for Vigilance in Antitrust).

Corruption in public procurement is reduced

It is worth noting that Spain has made significant efforts in recent years to fight corruption in public procurement. These efforts include the implementation of new regulations, the creation of supervisory bodies and the adoption of technologies to improve transparency and accountability.

The European Union has also expressed its interest in policies to prevent and fight corruption and, in particular, has encouraged their adoption in areas such as public procurement. 

In light of the 2023 data, OIReScon, in its report, comes to the following:

• Unlike in the case of collusive practices, there is a downward trend in the total number of corruption complaints received by the Anti-Fraud Agencies and Offices, with the open mailbox being the preferred means of reporting this type of practice.
• Service contracts are consolidated as the most affected by corrupt practices, with irregularities in the awarding of the contract being the most common cause for complaint and reporting. Such irregularities in the awarding process include those related to the processing of files or the bidding of the contract, which once again demonstrates that this part of the procurement cycle is particularly vulnerable.
• The importance of the preventive actions carried out in 2023 is highlighted, especially those related to the training of Agencies and Offices as well as the good practices implemented by them.

As with collusive practices, OIReScon makes a number of recommendations for the improvement of these parameters in the coming years:

• The need to reduce the length of the investigation procedure so that it does not take too long is emphasised.
• Further training of public employees by the responsible bodies and institutions is called for.
• Emphasis is placed on the need to approve a National Anti-Fraud Strategy for the harmonisation of criteria and the compatibility of actions. Likewise, a reinforcement of the State Network of Offices and Agencies for the Prevention and Fight against Fraud is encouraged for the homogenisation of criteria and their coordination.

At Osborne Clarke, we recommend that companies implement competition training courses that focus on the risk areas of the business, not only taking into account public procurement but also private procurement, where anti-competitive practices may also occur. Moreover, the design and implementation of customised competition compliance programmes are undoubtedly a very useful tool to avoid risks that, as we can see, materialise very frequently in practice.