Elements of Proof of Collusive Practices

Definition

IFI Guidelines define collusive practices as:

“…an arrangement between two or more parties designed to achieve an improper purpose, including to influence improperly the actions of another party.”

Elements of proof

  • An arrangement between two or more parties
  • Designed to achieve an improper purpose
  • Including to influence improperly
  • The actions of another party

An arrangement between two or more parties

An “arrangement” means an agreement, explicit or implicit, based o the conduct of the parties. The parties can be private or public entities, companies, individuals, or public officials. A company and its employees are considered to be one party and cannot collude with themselves.

The arrangement can be proven directly through witness statements or incriminating documents that record the illicit agreement, or circumstantially through, for example, evidence showing the rotation of winning bidders in a collusive bidding scheme, which indicates concerted action by more than one party.

Designed to achieve an improper purpose

An “improper purpose” means a purpose prohibited by law, regulation, procurement or IFI Guidelines, and includes attempts as well as completed offenses. More specific examples of an improper purpose include efforts to defeat competition and artificially raise prices in a collusive bidding scheme.

The design to achieve an improper purpose, like the arrangement between two or more parties, can be proven by direct evidence or inferred from the circumstances, such as unusual bidding patterns, the exclusion of other bidders or the quotation of unreasonably high bid prices.

Including to influence improperly

Covers agreements to pay bribes or commit other offenses, such as fraudulent or collusive practices, even if not successful.

The actions of another party

The other party can be a company, individual, government agency or other entity.