CMS Expert Guide: Right Bidding vs Bid Rigging in Poland

The following legislation regulates the bidding process and the issue of bid rigging in Poland:

1. The bidding process is regulated by the Public Procurement Law and the Polish Civil Code.

The issue of bid rigging is regulated by the Act on Competition and Consumer Protection, the Public Procurement Law, and the Polish Criminal Code.

Sanctions

Under competition law, the president of the Polish Competition Authority (the “PCA”) may impose a fine of up to 10% of the annual turnover on the company involved in the bid rigging.

As for criminal sanctions, a criminal court may impose a sanction on an individual involved in a bid rigging of up to three years’ imprisonment.

Exclusion from the bidding process

If a contracting authority discovers bid rigging in an ongoing tender, bidders could be excluded from the tender process. Grounds for exclusion arise when a contracting authority can reasonably establish the existence of an agreement aimed at distorting competition (a previous decision of the PCA is not required).

Nullity of the contract

If bid rigging is identified following the award of a contract, such contract may be declared null and void by a court on a request by the contracting authority or a participant in the tender. A request can be made within one month of the date on which a contracting authority (or tender participant) becomes aware of the reason for invalidation, but no later than one year from the date the contract is concluded.

Exclusion from future bidding processes

A decision issued by the PCA finding a competition law infringement by a contractor is an obligatory exclusion ground for such contractor in future tenders.

The exclusion of a contractor is for three years from the event giving rise to the exclusion. As a rule, the three-year period should be calculated from the occurrence of the competition law infringement; however, case law and the practice of contracting authorities are not uniform in this matter and the starting point of the three-year period must be checked individually in each case.

Self-cleaning procedure

A self-cleaning procedure is available for a contractor that infringed competition law under the following conditions:

1. it must remedy or undertake to remedy the damage caused by its conduct, including by monetary compensation;
2. it must fully explain the facts and circumstances of its conduct and the damage it caused, actively cooperating with the relevant authorities and the contracting authority;
3. it must take specific technical, organisational and human resource measures appropriate to prevent further misconduct, in particular:

1. terminate all relations with the persons or entities responsible for the contractor’s misconduct;
2. reorganise the staff;
3. implement a reporting and control system;
4. set up internal audit structures to monitor compliance with laws, internal regulations or standards;
5. put in place internal regulations on liability and compensation for non-compliance with law, internal regulations and standards.

The self-cleaning procedure is to be carried out by the contractor, without any obligation on the contracting authority to request it. The contractor should provide, on its own initiative, the contracting authority with proof that it has completed the self-cleaning process.

No, the PCA has not issued any guidelines on bid rigging.

The full data for 2022 is not yet available.

In 2021, the PCA:

1. initiated 26 proceedings concerning bid rigging (20 explanatory and six antitrust proceedings);
2. issued six bid rigging decisions.

In 2020, the PCA:

1. conducted 38 proceedings concerning bid rigging (both explanatory and antitrust proceedings);
2. issued six bid rigging decisions.

The full data for 2022 is not yet available.

In 2021:

1. bid rigging proceedings (antitrust) represented 60% of all initiated antitrust proceedings concerning anticompetitive agreements (both vertical and horizontal agreements);
2. bid rigging decisions represented 50% of all decisions issued concerning anticompetitive agreements (both vertical and horizontal).

In 2020:

1. the PCA initiated seven antitrust proceedings concerning anticompetitive agreements (only horizontal agreements; no proceedings concerning vertical agreements were initiated). The data on the number of initiated bid rigging proceedings is not available;
2. bid rigging decisions represented 43% of all decisions issued concerning anticompetitive agreements (both vertical and horizontal).

In 2022, the PCA issued one bid rigging decision, in which the fine was EUR 23,225 (PLN 108,924).

In 2021, the PCA issued six bid rigging decisions, in which the total fines were EUR 924,913 (PLN 4,337,749).

In 2020, the PCA issued six bid rigging decisions, in which the total amount of the fines was approx. EUR 28,548,414 (PLN 133,889,208).

A leniency programme in Poland is also available for companies and individuals involved in bid rigging. However, participation in a leniency programme does not mean immunity from criminal liability (leniency only covers the fines imposed by the PCA). Considering the potential criminal liability for bid rigging, leniency applications involving bid rigging are very rare in practice.

Yes, there is criminal liability for individuals involved in bid rigging (bid rigging is the only competition law infringement in Poland involving criminal liability).

According to Polish criminal law, any individual who enters into an agreement with another individual to the detriment of the entity for which the tender is made is subject to a penalty of imprisonment of up to three years.

Combatting bid rigging is one of the PCA’s top priorities. The PCA has recently established a new, specialised unit that deals exclusively with bid rigging cases. Treating this field as a priority is also confirmed by the number of proceedings initiated and overall percentage of bid rigging cases in the total number of decisions concerning anticompetitive agreements issued by the PCA.

In recent years, the following sectors are the ones mostly subject to bid rigging investigations: supply of goods and services related to road construction and maintenance, provision of passenger transport services, provision of tree cutting, planting and maintenance services, waste collection and transport services, programming and IT services, repair and construction services.

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