Just last April, Colombia changed its law concerning government bidding to make it mandatory to use standard tender document for public transport works. The new law’s intent was to make public bidding more transparent and reduce corruption in the process.
A study conducted by the Colombian Society of Engineers (SCI) that used data gathered on the government contracting platform revealed that tender specifications were often narrowly written to benefit particular bidders.
Sophie Brown and Nicolas Penagos reported on efforts to boost competition in Colombia’s infrastructure contracts for Open Contracting Partnership:
The SCI’s analysis showed that on many tenders, there was only one bidder. Researchers sometimes use single-bid awards as a proxy indicator for increased corruption risk because these contracts are more likely to have been manipulated to favor a certain company. Whereas those awarded fairly are likely to have a higher number of bidders.
In 2017, the SCI found that there was only one bidder on more than half (56%) of all department contracts awarded that year (in total, more than 2,500 contracts worth over COP 1 trillion). At the municipal level, 21,500 contracts were awarded for more than COP 8 trillion – 94% of which had three or fewer bidders. Similar conclusions were drawn in studies conducted by another organization that represents larger companies, the Colombian Chamber of Infrastructure (CCI).
As a result of the industry groups’ findings, the national government made it mandatory to use standard tender documents for public transport works. These documents (.zip download) outline very specific requirements or targets that bidders must meet in order to participate in the tender process and win contracts (for example, the firm must have at least X years experience in carrying out similar projects). This information relates to transparency agreements, basic bidding letters, past experience, organizational capacity, financial status, social clauses to hire local staff, among others. Standard documents like these are important in cases where there is a high risk of corruption, but they’re also useful for small entities that have limited capacity since they can use ready-made documents instead of spending time and resources preparing bespoke specifications.