{"id":1443,"date":"2019-05-17T17:49:21","date_gmt":"2019-05-17T07:49:21","guid":{"rendered":"https:\/\/comprara.com.au\/procurement-glossary\/collusion\/"},"modified":"2020-11-02T02:50:33","modified_gmt":"2020-11-02T02:50:33","slug":"collusion","status":"publish","type":"glossary","link":"https:\/\/www.comprara.com.au\/procurement-glossary\/collusion\/","title":{"rendered":"Collusion"},"content":{"rendered":"<p>Secret <a class=\"glossaryLink\" aria-describedby=\"tt\" data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Agreement&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;The word agreement can have both informal and formal meanings.  Informally the word may be used to describe a contractual agreement between parties: &#x2018;the agreement has three months to run&#x2019;.  The formal meaning of the word is used in a legal context to describe one of the prerequisites for considering a contract valid.  The parties must have &#x2018;a meeting of the minds&#x2019;, sometimes called &#x2018;consensus ad idem&#x2019;, meaning that for a contract to exist the parties must share a common understanding, and there must be no mistake as to what is being agreed.  See also Contract. &amp;lt;br\/&amp;gt;&lt;\/div&gt;\" href=\"https:\/\/www.comprara.com.au\/procurement-glossary\/agreement\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>agreement<\/a> between two or more individuals or organisations to limit <a class=\"glossaryLink\" aria-describedby=\"tt\" data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Competition&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;Competition is a contest between businesses that are striving for the client&#x2019;s business.  Organisations in business are usually in competition with others for customers, markets, materials and, of course, contracts.  Most procurement governance schemes value competition between suppliers as a means of securing value.   Many markets are not &#x2018;free and open&#x2019; as there are barriers to entry or market distortions such as monopoly, and because market offerings are not homogenous. Similarly, the practice of inviting three quotes, bids, offers or tenders may not harness the available competition.  See also Market Structures.&amp;lt;br\/&amp;gt;&lt;\/div&gt;\" href=\"https:\/\/www.comprara.com.au\/procurement-glossary\/competition\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>competition<\/a> by the use of such methods as deception, misleading behaviour or fraudulent activity, where the objective is to obtain an unfair advantage.  Collusion may take the form of a <a class=\"glossaryLink\" aria-describedby=\"tt\" data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Market Sharing&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;Market sharing occurs when firms who are obvious competitors collude and agree to divide a market so that they are protected from competitive practices.  The market may be shared geographically or by customer sector.  Market sharing can also involve an agreement not to compete for established customers or to avoid the production of similar goods and services.  As an example, bidders may decide to reply to tenders with inflated bids so as to guarantee the incumbent retaining the account, in return for reciprocal behaviour on other subsequent tenders.  See also Collusion.&amp;lt;br\/&amp;gt;&lt;\/div&gt;\" href=\"https:\/\/www.comprara.com.au\/procurement-glossary\/market-sharing\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>market sharing<\/a> <a class=\"glossaryLink\" aria-describedby=\"tt\" data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Agreement&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;The word agreement can have both informal and formal meanings.  Informally the word may be used to describe a contractual agreement between parties: &#x2018;the agreement has three months to run&#x2019;.  The formal meaning of the word is used in a legal context to describe one of the prerequisites for considering a contract valid.  The parties must have &#x2018;a meeting of the minds&#x2019;, sometimes called &#x2018;consensus ad idem&#x2019;, meaning that for a contract to exist the parties must share a common understanding, and there must be no mistake as to what is being agreed.  See also Contract. &amp;lt;br\/&amp;gt;&lt;\/div&gt;\" href=\"https:\/\/www.comprara.com.au\/procurement-glossary\/agreement\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>agreement<\/a>, <a class=\"glossaryLink\" aria-describedby=\"tt\" data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Price Fixing&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;When competing suppliers agree on a pricing structure amongst themselves, the practice is known as price fixing.  It can take various forms and includes establishing minimum prices or an agreed formula for the pricing of goods and services or the non-competitive discounting of same.  Usually such agreements are informal and verbal, although some may be in writing.&amp;lt;br\/&amp;gt;&lt;\/div&gt;\" href=\"https:\/\/www.comprara.com.au\/procurement-glossary\/price-fixing\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>price fixing<\/a> or <a class=\"glossaryLink\" aria-describedby=\"tt\" data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Bid Rigging&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;Bid rigging occurs when suppliers communicate with each other before lodging their bids and agree amongst themselves who will be the successful bidder and at what price.  This practice is one type of collusive tendering and may be discouraged by introducing new bidders and, regularly benchmarking offers against industry standards.  See also Collusion.&amp;lt;br\/&amp;gt;&lt;\/div&gt;\" href=\"https:\/\/www.comprara.com.au\/procurement-glossary\/bid-rigging\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>bid rigging<\/a>.  Legally, all acts affected by collusion are considered to be void.  See also <a class=\"glossaryLink\" aria-describedby=\"tt\" data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Cartel&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;An illegal association of producers bringing to market the same or similar categories who cooperate with each other to influence the market.  While they may appear to be competing with each other, their actions such as fixing prices, restricting output, dividing markets or rigging tender bids are based on self-interest.  See also Collusion.&amp;lt;br\/&amp;gt;&lt;\/div&gt;\" href=\"https:\/\/www.comprara.com.au\/procurement-glossary\/cartel\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>Cartel<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Secret agreement between two or more individuals or organisations to limit competition by the use of such methods as deception, misleading behaviour or fraudulent activity, where the objective is to obtain an unfair advantage. Collusion may take the form of a market sharing agreement, price fixing or bid rigging. Legally,&#8230; <br \/><a style=\"color:#00b4cd;\" class=\"excerpt-anchor\" href=\"https:\/\/www.comprara.com.au\/procurement-glossary\/collusion\/\">Read more<\/a>.<\/p>\n","protected":false},"author":2,"featured_media":0,"menu_order":0,"template":"","meta":{"_acf_changed":false,"_uag_custom_page_level_css":""},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Collusion - Comprara<\/title>\n<meta name=\"description\" content=\"Collusion\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.comprara.com.au\/procurement-glossary\/collusion\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Collusion - Comprara\" \/>\n<meta property=\"og:description\" content=\"Collusion\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.comprara.com.au\/procurement-glossary\/collusion\/\" \/>\n<meta property=\"og:site_name\" content=\"Comprara\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Comprara\/\" \/>\n<meta property=\"article:modified_time\" content=\"2020-11-02T02:50:33+00:00\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:site\" content=\"@Comprara\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.comprara.com.au\/procurement-glossary\/collusion\/\",\"url\":\"https:\/\/www.comprara.com.au\/procurement-glossary\/collusion\/\",\"name\":\"Collusion - 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Collusion may take the form of a market sharing agreement, price fixing or bid rigging. Legally,... Read more.","_links":{"self":[{"href":"https:\/\/www.comprara.com.au\/wp-json\/wp\/v2\/glossary\/1443"}],"collection":[{"href":"https:\/\/www.comprara.com.au\/wp-json\/wp\/v2\/glossary"}],"about":[{"href":"https:\/\/www.comprara.com.au\/wp-json\/wp\/v2\/types\/glossary"}],"author":[{"embeddable":true,"href":"https:\/\/www.comprara.com.au\/wp-json\/wp\/v2\/users\/2"}],"version-history":[{"count":0,"href":"https:\/\/www.comprara.com.au\/wp-json\/wp\/v2\/glossary\/1443\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.comprara.com.au\/wp-json\/wp\/v2\/media?parent=1443"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}