Pool maintenance

3 pool maintenance firms fined S$419,000 for collusion in over 500 tenders: CCCS

  • Companies would agree among themselves on the quotes they would submit to calls for tenders to help each other win contracts
  • The ruse was uncovered after a whistleblower in 2017, which led to investigations by Singapore’s Competition and Consumer Commission
  • Affected parties have the right to take legal action against companies, says CCCS

SINGAPORE — Over a 10-year period, three pool and water feature maintenance companies colluded in bidding on hundreds of tenders to help each other win contracts.

On Monday, December 14, they were fined a total of S$419,000 by the Competition and Consumer Commission of Singapore (CCCS).

The three companies – CU Water Services, Crystalene Product(S) and Crystal Clear Contractor – rigged 521 tenders from 220 customers, including hotels such as Shangri-La Hotel and Park Royal on Kitchener Road and condominiums such as Adam Park Condominium and Stevens Park, between 2008 and 2017.

The CCCS told a press conference that it began investigating the three companies in September 2017 after receiving a tip-off in July of that year.

Investigations revealed that bid-rigging occurred separately between CU Water and Crystalene, and between CU Water and Crystal Clear.

Bid-rigging occurs when two or more suppliers or buyers agree on bid submissions for tenders. One party may agree to bid high on one tender so the other can win it, then they switch roles on the next tender so they can take turns winning the contracts.

One company may also agree not to participate in certain tenders so that the other can win the contract.

In November 2017, the commission conducted a series of unannounced inspections of the parties’ premises and interviewed key personnel.

CCCS found a “systematic pattern” involving, for example, one company intentionally offering higher prices to give another company a better chance of winning the bid.

The requesting party – the one who wants to win the auction – often specifies a price for the supporting party to quote, and the supporting party will then provide a quote that they believe is higher than the requesting party’s.

Screenshots of emails shown to the media showed the companies sharing customer details with each other and asking for supporting quotes.

CCCS Managing Director Sia Aik Kor said, “Bid-rigging is one of the most damaging types of anti-competitive behavior because it distorts the competitive bidding process, thereby preventing customers from obtaining best value for money for their offerings.

“Bidders should prepare their bids independently and refrain from participating in any discussion, coordination or plan of an anti-competitive nature.”

Even if a potential customer asked a party to source additional offers, the parties should have left it to their competitors to independently decide their own offers, the commission added.

The sanctions imposed on companies are:

  • Water CU: S$308,680

  • Cristalene: S$41,541

  • Clear: $68,793

COMPANIES THAT APPLIED FOR LENIENCY GOT LOWER PENALTIES

Shortly after investigations began, Crystalene and Crystal Clear applied for leniency under CCCS’s leniency program, while CU Water did not.

The program grants lenient treatment to companies that are part of a cartel agreement or concerted practice when providing information about their cartel activities and cooperating with investigations.

Under this program, companies eligible for leniency may receive full immunity or a reduction of up to all or half of monetary penalties, where applicable.

An additional 10% discount was applied to further reduce the financial penalties for Crystalene and Crystal Clear for admitting wrongdoing and cooperating with CCCS investigations under the Fast Track process, where parties admit responsibility for that the investigation procedure is more efficient and that resources are saved.

Asked how affected customers can seek compensation from companies for paying uncompetitive rates, Ms. Winnie Ching, director of CCCS’ legal division, said they should take the matter to court.

“Affected parties have the right to sue if they can prove that they suffered harm as a result of the conduct,” Ms Ching said.