Advisory to a government agency on logistics arrangements

Under a policy proposal to achieve cost savings from purchasing large amounts, a government agency would appoint a logistics company to consolidate procurement of goods from manufacturers for resale and distribution to retailers. The retailers would in turn sell the goods to consumers at prices determined by the government agency. The government agency requested CCCS’s advice on whether there were any competition concerns that the appointed company, in delivering the goods to the retailers, may restrict competition by preventing other delivery providers from performing this role.

CCCS advised that there were no competition concerns with the role of the appointed company in distributing the goods to the retailers as this was an essential part of its role in reselling the goods to the retailers. Further, the appointed company would subcontract the delivery of the goods through tenders for the selection of delivery vendors. This would provide an opportunity for interested delivery providers to participate in the tenders and be selected as a service provider to the appointed company.