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3 firms fined for rigging bids in tenders for maintenance of swimming pools, other water features

3 firms fined for rigging bids in tenders for maintenance of swimming pools, other water features

(Photo: Pexels/Pixabay)

SINGAPORE: Three companies have been issued financial penalties totalling nearly S$420,000 for rigging bids in tenders for maintenance services for swimming pools, spas, fountains and other water features, said the Competition and Consumer Commission of Singapore (CCCS) on Monday (Dec 14).

The bid-rigging conduct by CU Water Services, Crystalene Product and Crystal Clear Contractor affected developments including condominiums and hotels in Singapore, the consumer watchdog found.

CCCS' investigation, which began in September 2017, revealed numerous instances of bid-rigging conducted between the years 2008 and 2017. The bid-rigging occurred between CU Water and Crystalene, and separately between CU Water and Crystal Clear, in tenders called by privately owned developments. 

(Graphic: CCCS)

The bid-rigging involved a "systematic pattern", said CCCS, in which either party would request a support quotation from the other party, with the support quotation by the supporting party intended to be priced higher than the requesting party's own bid. 

In some instances, there was an understanding between the parties that one would not quote lower than the party who was the incumbent contractor for a privately owned development. The non-incumbent company would approach the incumbent contractor to ask for a price to quote, and then provide a supporting quote it believed to be higher than the quote of the incumbent contractor.

"CCCS found that the bid-rigging conduct between the parties resulted in there being no competitive pressure between the parties to submit their best offers to potential customers.

(Graphic: CCCS)

"The conduct also created the false impression that the bids submitted by the parties were the outcome of a competitive tender process when it was not. As a result, potential customers were not able to obtain competitive offers that could best meet their requirements," said the watchdog. 

CCCS said that Crystalene and Crystal Clear applied for leniency shortly after unannounced inspections were conducted at their business premises. 

CCCS' leniency programme offers different levels of benefits to businesses depending on whether they are the first to come forward with information about a cartel and whether investigations have already begun by the time the business comes forward. 

Benefits may include immunity from financial penalties and a reduction of financial penalties.

Based on findings set out in the infringement decision issued by CCCS, CU Water was fined S$308,680, Crystalene was fined S$41,541 and Crystal Clear fined S$68,793.

(Graphic: CCCS)

The consumer watchdog said that in levying financial penalties, it took into account each business' relevant turnover, the nature and seriousness of the infringement, and aggravating and mitigating factors. 

Crystalene and Crystal Clear were both given leniency discounts. An additional 10 per cent discount was applied to their fines as a result of their admissions to the infringement conduct and their cooperation with investigations under the Fast Track Procedure, said CCCS.

"Bid-rigging is one of the most harmful types of anti-competitive conduct as it distorts the competitive bidding process, thereby preventing customers from getting the best value for their tenders," said CCCS chief executive Sia Aik Kor.

"Tenderers must independently prepare their bids and refrain from participating in any discussion, coordination, or plan that is anti-competitive in nature.”

"Any business that is approached to join in anti-competitive agreements should immediately reject the approach and publicly distance itself from any such discussions," Ms Sia added.

Source: CNA/ic(hs)

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