Bid Rigging in Public Tenders and Auctions in Spain (Art. 262 CP)

Agreeing under the table on who wins a tender, sharing out a public body's contracts or pressuring a competitor not to submit a bid is not a mere administrative irregularity: it may amount to the offence of bid rigging in public tenders and auctions under Article 262 of the Spanish Criminal Code (CP). As criminal defence lawyers specialising in economic crime and public procurement, we explain what conduct is punished, the penalties it carries and how the defence is built.

What Article 262 CP Punishes

Art. 262 CP criminalises four distinct types of conduct, all aimed at distorting the outcome of a public tender or auction. It punishes those who:

• Solicit bribes or promises in exchange for not taking part in a public tender or auction —in other words, being paid (or agreeing to be paid) to withdraw or not to bid.
• Try to drive bidders away from the tender by means of threats, bribes, promises or any other artifice. This covers pressure, bribery or deception aimed at keeping a competitor out.
• Collude with one another in order to alter the auction price. This is the classic collusive pact between bidders to share out the award or fix the price.
• Fraudulently break off or abandon the auction after obtaining the award —the fraudulent withdrawal of the successful bidder to force a fresh tender or a better outcome.

The protected legal interest is free competition in the bidding process: the offence sits among those that protect property and the socio-economic order, and its core is the fraud against the public trust that the auction system presupposes.

Penalties: Prison, Fine and a Ban on Public Contracting

Art. 262.1 CP imposes a three-tier criminal response that is worth knowing precisely:

• One to three years in prison.
• A fine of twelve to twenty-four months (the day-fine system, where the daily amount is set in the judgment according to the offender's means).
• Special disqualification from bidding in judicial auctions for three to five years.

The most significant business consequence appears where the tender or auction is called by the public administration or public bodies. In that case, the provision adds a specific penalty: the individual and the person or company they represent are subject to a special disqualification that always includes the right to contract with the public administration for a period of three to five years. For a company that lives on public works and services, this disqualification can in practice be more onerous than the prison sentence itself, because it shuts the company out of the public market for years.

Art. 262.2 CP also allows the accessory consequences of Art. 129 CP (closure, dissolution, prohibition of activities, intervention) to be imposed where the offender belongs to a company, organisation or association —even a temporary one— devoted to such practices.

Relationship with Public Procurement

Art. 262 CP does not operate in a vacuum: it coexists with the administrative regime of public-sector procurement. Public contracting legislation already provides its own mechanisms —bans on contracting, exclusion of bidders, annulment of awards— against collusive or fraudulent conduct. What the Criminal Code adds is the more severe response when the pact between bidders or the pressure on competitors reaches the gravity proper to a criminal offence.

In practice, a single course of conduct can trigger several simultaneous fronts:

• A case before the competition authority for collusive practices (market-sharing or price-fixing agreements between bidders).
• A ban on contracting and possible exclusion from the procedure at the administrative level.
• The criminal proceedings for the offence under Art. 262 CP, with its penalties of prison, fine and disqualification.

This overlap of proceedings calls for a coordinated defence: what is stated or documented in one of them can carry over into the others, and the criminal strategy cannot be designed in isolation from the competition or administrative files.

The Line with the Market Offence (Art. 284 CP)

It is useful to distinguish Art. 262 CP from the market manipulation offence under Art. 284 CP, with which it is sometimes confused:

• Art. 262 CP: attacks the integrity of a specific public auction or tender. The reproach focuses on collusion between bidders or pressure on bidders to distort the outcome of that tender.
• Art. 284 CP: punishes, among other conduct, the alteration —through violence, threat, deception or any other artifice— of the prices that should result from free competition of goods, products, financial instruments or services in the market. Its prison penalty is broader (six months to six years) and it looks at the market as a whole, not at an isolated tender.

Correct classification is not an academic nuance: it determines the applicable offence, the sentencing framework and the possible aggravating factors. A misframed charge —invoking Art. 284 CP where the facts only describe a pact in a specific auction, or vice versa— is in itself fertile ground for the defence.

Lines of Defence

The defence against a charge under Art. 262 CP is built on the elements of the offence, and very especially on proof of the agreement. Our main lines of action are:

• Absence of collusion: the core of the offence in its most common form is the pact between bidders. Showing that no collusive agreement existed —that the bids were prepared independently, with their own economic rationale— neutralises the charge. The mere coincidence of prices or the presence of several related companies is not equivalent to collusion.
• Legitimate bidding: demonstrating that the conduct stayed within the rules of the procedure (withdrawing from a tender on a reasonable business decision, not bidding for lack of technical or financial capacity) and that there was no bribe, threat or artifice aimed at distorting the outcome.
• Lack of the offence or of intent: the offence requires intentional, fraudulent conduct. Errors in the bid, reasonable readings of the tender documents or justified withdrawals do not satisfy the criminal type.
• The Art. 262.3 CP exemption: assessing, where appropriate, the avenue of exemption through full cooperation with the competition authority and with the judicial authority or the public prosecutor, on the terms and within the time limits the provision sets, in connection with a leniency application before the competition authority.
• Challenging the evidence: reviewing the lawfulness and sufficiency of the evidence (intercepts, emails, statements by co-defendants) on which the existence of the agreement rests.

How We Work

These proceedings are rarely simple: they combine voluminous administrative documentation, competition reports and, frequently, a plurality of those under investigation (companies and directors). That is why the analysis must be early and technical. We study the tender documents, the chronology of the bidding, the communications between the parties and the economic coherence of the offers to build a solid defence coordinated with the administrative and competition fronts.

Two further factors shape the strategy. First, the interests of the company and those of its individual directors do not always run in parallel, and each may need a clearly differentiated defence. Second, anything the company has produced before the competition authority or the contracting body can later surface in the criminal case, so every statement and document must be assessed for its impact across all three fronts before it is filed. Handling these proceedings as a single, coordinated whole —rather than as three separate problems— is, in our experience, what gives the defence its real strength.