Competition watchdog issues notices to three firms for rigging bids in tenders

The competition watchdog served three companies with legal documents on Tuesday to say that they had illegally rigged their bids in tenders called by privately owned developments, which may lead to them being financially penalised.

The three firms - CU Water Services, Crystalene Product (S) and Crystal Clear Contractor - had exchanged information and coordinated their bids for maintenance services for swimming pools, spas, fountains and other water features at developments such as hotels and condominiums between October 2008 and June 2017, the Competition and Consumer Commission of Singapore (CCCS) said on Wednesday.

Because of this collusion in the bidding process, customers were unable to obtain offers that best met their requirements and provided the best value, the watchdog said.

CCCS, which started investigating the companies in September 2017, found that there were bilateral agreements or concerted practices between CU Water and Crystalene Product, and separate agreements between CU Water and Crystal Clear, to collude in their bids for tenders.

While the companies were meant to be bidding independently, one firm would request a supporting quotation from another, which it believed would be higher than its own.

The second company would then give the higher quotation to the customer. This meant that the companies were able to submit a higher quotation for their bids.

At times, one company would specify a price for the other company to use in the supporting quotation.

Because of these arrangements, there was no competitive pressure on the companies to submit their best offers to customers.

The tenders affected by the arrangements between CU Water and Crystalene Product were called from Oct 11, 2008, to May 29, 2017, while the tenders affected by the arrangements between CU Water and Crystal Clear were called from Aug 20, 2011, to June 16, 2017.

The firms can use the notices to help them make their representations to the watchdog, including possibly applying for the CCCS' leniency programme, which could see them given total immunity or a reduction of potential financial penalties in return for information provided on cartel activities.

The CCCS will then decide on the punishments it wants to impose later.

A version of this article appeared in the print edition of The Straits Times on April 03, 2020, with the headline 'Competition watchdog issues notices to three firms for rigging bids in tenders'. Print Edition | Subscribe