KUALA LUMPUR (June 22): Parties found implicated in bid rigging conduct in public procurement will be blacklisted by the Ministry of Finance (MoF) for five years, said enforcement agency Malaysia Competition Commission (MyCC).

Under the MoF's newly released circular on Integrity in Public Procurement (PK 1.6) which came into effect on June 1, MyCC said government agencies are also required to pay attention to and report signs and issues of bid rigging cartels to MyCC.

"Following the implementation of this circular, individuals or companies found to be involved in bid rigging conduct in public procurement will be blacklisted by the MoF for a period of five years," MyCC said in a statement on Wednesday (June 22).

"This has been met with mixed reaction amongst stakeholders, particularly in relation to its effectiveness in combating such activities. It must be highlighted that this is a step forward by the government in sending a strong message that bid rigging cartel activities will not be tolerated."

MyCC chief executive officer Iskandar Ismail said that MyCC is grateful for the weight given to the Competition Act 2010 in the PK 1.6 circular to strengthen its enforcement efforts in combating bid rigging activities in government tenders.

The Act applies to all commercial activities undertaken within and outside of Malaysia that affect competition in the Malaysian market. It provides a regulatory framework including powers to investigate, adjudicate and impose penalties on the perpetrators of the competition laws.

"In the course of our work over the years, we discovered that apart from corruption and fraudulent actions, which are commonly associated with leakages, big rigging is a major threat to public leakages.

"This form of cartel occurs when two or more competitors conspire to manipulate the procurement process, denying the opportunity for genuine bidders and distorting the competition process altogether," Iskandar Ismail said.

MyCC noted that the PK 1.6 was made possible through its ongoing engagement with relevant stakeholders, including the MoF and the Malaysian Anti-Corruption Commission, as well as its advocacy efforts on the Competition Act 2010 over the last decade.