- Companies would agree on quotes they would submit to tenders to help each other win contracts
- The ruse was discovered after a whistleblower in 2017, which led to investigations by the Singapore Competition and Consumer Commission.
- Affected Parties Have the Right to Bring Legal Action Against Companies, CCCS Says
SINGAPORE – Over a period of 10 years, three swimming pool and water body maintenance companies have come together to bid for hundreds of tenders to help each other win contracts.
On Monday, December 14, they were fined a total of S $ 419,000 by the Singapore Competition and Consumer Commission (CCCS).
The three companies – CU Water Services, Crystalene Product (S) and Crystal Clear Contractor – rigged 521 offers from 220 clients, including hotels such as Shangri-La Hotel and Park Royal on Kitchener Road and condominiums such as Adam Park Condominium and Parc Stevens, between 2008 and 2017.
The CCCS said during a press briefing that it began investigating the three companies in September 2017 after receiving a report in July of the same 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 to bids for tenders. One party may agree to make a high bid on one tender so that the other can win, and then reverse roles on the next tender so that they take turns winning the contracts.
A company can also agree not to participate in certain tenders so that the other can win the contract.
In November 2017, the commission carried out a series of unannounced inspections at the premises of the parties and interviewed key personnel.
CCCS discovered a “systematic model” involving, for example, one company intentionally offering higher prices to give another company a greater chance of winning the bid.
The requesting party – the one who wants to win the bid – would often specify a price that the supporting party should offer, and the supporting party will then provide a quote that they feel is higher than that of the requesting party.
Screenshots of emails presented to the media showed companies sharing customer details and asking for quotes to support them.
CCCS Managing Director Sia Aik Kor said, “Bid-rigging is one of the most harmful types of anti-competitive behavior because it distorts the competitive bidding process, thereby preventing customers from get the best value for money for their offers.
“Bidders must prepare their bids independently and refrain from participating in any discussion, coordination or plan of an anti-competitive nature. “
Even if a party were invited by a potential customer for additional offers, the parties should have left it up to their competitors to decide their own offers independently, the commission added.
The sanctions imposed on companies are:
CU water: USD 308,680
Crystal: S $ 41,541
Crystal clear: S $ 68,793
COMPANIES SEEKING CLÉMENCY HAVE RECEIVED LOWER SANCTIONS
Shortly after the investigations began, Crystalene and Crystal Clear applied for leniency under the CCCS leniency program, while CU Water did not.
The program accords lenient treatment to companies that are part of an agreement or concerted practice when they submit information on their cartel activities and cooperate in investigations.
Under this program, companies eligible for leniency can benefit from full immunity or a reduction of up to all or half of the financial penalties, where applicable.
An additional 10% discount was applied to further reduce the financial penalties of Crystalene and Crystal Clear for admitting their misconduct and cooperating with CCCS investigations under the expedited process, where the parties admit their liability in order that the investigation procedure be 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 the legal division of CCCS, said they should take the case to court.
“Affected parties have the right to bring legal action if they can prove that they suffered damage as a result of the conduct,” Ms. Ching said.