Hong Kong (Inadvertently?) Deters Consortium Bidding; Consults On First Individual Exemption Application

Author:Mr Stephen Crosswell and Bill Brown
Profession:Baker & McKenzie

The Hong Kong Competition Commission (HKCC) has issued a recommendation that organizations inviting bids for contracts prohibit bidders from communicating with any other person prior to making a bid. Although there are certain exceptions, these are narrowly drawn, and many consortium bids and supply arrangements would be ruled out if this recommendation is followed. The recommendation is contained in a "User Guide" for procuring organizations. Fortunately, the recommendation is not legally binding, and HKCC has made it clear that procuring organizations are free not to follow it. Unusually, businesses were not given an opportunity to comment on this proposal before it was finalized, as there was no prior public consultation.

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HKCC's approach contrasts with that of competition authorities in other jurisdictions such as Ireland, where the competition authority has actively encouraged consortium bidding by small and medium-sized businesses (SMEs), as this increases competition. The authority has issued a guide for SMEs, explaining how they can engage in consortia while complying with competition law. It is hoped that HKCC will do likewise, as a counterpart to its...

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