The consequences are increased prices and deteriorating quality of products and services.

Our services include - Procurement Intelligence, Procurement Analytics, Spend Analysis, Strategic Sourcing, Compliance Management, Low Cost Country, Supply Chain Risk Management, Sustainable Procurement and Supplier Diversity Management. Cues on new suppliers for category Y can be taken from the suppliers of category X. Competition laws often forbid private cartels. You may not get immediate savings in this process but you may still be able to break the cartel. New suppliers should feel that they also have a chance of winning the bid.You should keep on updating and refreshing supplier database by incessantly doing new supplier research.  Non-collusion agreements Suppliers should be made to sign a non - collusion agreement as part of the bid documents. During an electronic auction (e-auction), bidding suppliers can view the changing bids and their ranks; however, they do not know the names of their competitors. Non-interaction between the suppliers during and after e-auction can aid in preventing cartel formation.  Ensuring Supplier Anonymity Using an electronic platform for performing reverse auctions can ensure supplier anonymity. The consequences are increased prices and deteriorating quality of products and services.EmpoweringCPO.
Onboarding new suppliers You should foster new supplier development by inviting them in the Request for Proposals (RFPs) and bidding process.EmpoweringCPO is a Procurement and Sourcing Advisory Firm; our services are delivered using proven Knowledge Process Outsourcing (KPO) model with delivery centers located in India. The cartel forming companies divide the markets and customers between themselves and agree on prices. It is fitting to resolve their queries and concerns, to train them on the company’s sourcing software, promote site visits for them. Thus the dynamic competition inherent in reverse auctions can result in equilibrium pricing and delivering hard dollar savings for you. There should be a mandate for the procurement team to give importance to new suppliers.Chief Procurement Officers (CPOs) are daunted with the demanding task of identifying and breaking these cartels. Several economic studies and legal decisions of antitrust authorities have found that the median price increase achieved by cartels in the last 200 years is around 25%.A cartel is formed when businesses agree to act together for an anti-competitive purpose instead of competing against each other.Our main offering is to support procurement organizations with market intelligence and analytical rigor so as to help achieve higher strategic wholesale Brass Door Stop factory sourcing project savings and support category management on an ongoing basis. In case when the suppliers are not available for a particular category X, you can pursue on finding suppliers for another Category Y that would serve the same purpose. This will ascertain a stronger buyer-supplier bond with them.
And ultimately, if the supplier power has increased substantially and the chances of breaking a cartel are bleak, you can start looking for alternate products.  Building a supplier pool Cost of fighting cartels is more than the cost of acquiring new suppliers. However, it is important for you to take into account the “Cost of fighting the Cartel” as in some cases, the decision to break the cartel can backfire. It is probable though that the incumbent supplier may come to you with a better price offering on realizing that they are losing important business. Fear of getting disqualified from the bidding process may deter the suppliers from collaborating with each other and thus you may be able to break the cartel.   Splitting contracts Bringing down the size of business provided to the incumbent supplier by involving a new supplier. Identifying and breaking up cartels is an important part of the competition policy in most countries. Say, if supplier X had the contract earlier, but it is found that they are a part of the cartel, then it is advisable to split up the new contract between the new supplier and supplier X. You can also consider creating private incentives for the cartel members to play one member against the other.If the supplier is offering inconsistent prices, suspiciously high prices or there is a huge difference in price of winning bid and other bids, surprisingly similar prices between bids, fewer bids for a particular market or suspicious subcontracting agreements, then it should trigger an alarm for you. As Chief procurement officers (CPOs), you are daunted with the demanding task of identifying and breaking these cartels, especially in a reverse auction process.