Collusion detection in public procurement : challenges and opportunities for implementing digital screening in Finnish municipalities

Abstract

Collusion causes inflated prices and consumer harm. Current evidence on traditional detection methods shows that there is room for improvement in detecting collusion. Using data-driven approaches such as digital screens to detect collusion is a new proactive method to detect possible cartels.

This study aims to assess the current state of collusion detection in public procurement in Finnish municipalities, with a particular focus on the use of digital screening technologies. It also seeks to identify the potential challenges that public procurers may encounter when implementing these technologies to detect collusion.

This study employs qualitative research methodology. Data was collected through semi-structured interviews with seven procurement managers from various municipalities in Finland.

Based on the data municipalities currently do not employ any systematic methods for detecting collusion. Detection is based on the procurer’s own expertise and is naturally human error prone. The main challenges for implementing digital screens can be divided into organisational, technical and economic. There is a lack of standards, roles and processes to handle procurement data for analysis in municipalities. Procurement data is currently underutilized for analytics by municipalities and the “systems jungle” makes standards and sharing of the data difficult.

There are however no insurmountable obstacles why digital screens could not be tried to implement. Current trends such as investments in data-driven management and initiatives for national data repositories support the development and implementation of digital screens.