3 water feature maintenance firms fined over bid rigging

Cartel-style activity over nearly a decade concerns 521 contracts and 220 customers

The companies had coordinated their bids for maintenance services for swimming pools and other water features at developments such as hotels and condominiums. PHOTO ILLUSTRATION: PEXELS

Three water feature maintenance companies have been fined by the competition watchdog for conducting cartel-style bid-rigging activities for close to a decade.

CU Water Services, Crystalene Product (S) and Crystal Clear Contractor 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.

The illegal bid rigging concerned 521 contracts and 220 customers, and took place between August 2008 and June 2017. Customers included hotels like the Shangri-La and Grand Copthorne Waterfront, as well as the management corporations and managing agents of condominiums.

For this collusion, the Competition and Consumer Commission of Singapore (CCCS) fined CU Water $308,680. Crystalene and Crystal Clear were fined $41,541 and $68,793, respectively, after receiving a "leniency discount" to have their financial penalties reduced because they came forward to share information on the cases.

The watchdog began looking into the three companies' practices after a tip-off by a whistle-blower in July 2017. It served the companies with legal documents in March this year to say they illegally rigged their bids in tenders called by privately owned developments.

In November 2017, CCCS conducted unannounced inspections at the companies' premises and interviewed key personnel.

At that point, it received leniency applications from Crystal Clear and Crystalene.

Investigations found that there were agreements between CU Water and Crystalene, as well as between CU Water and Crystal Clear, to collude in their bids for tenders.

Instead of submitting tender bids independently, one company 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. At times, one company would specify a price for the other to use in the supporting quotation.

These arrangements meant the companies were able to submit higher-priced quotations across the board. There was no competitive pressure to submit their best offers to the customers, said the watchdog. Customers were unable to obtain offers that best met their requirements and provided the best value, it added.

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

CCCS chief executive Sia Aik Kor said: "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."

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

She urged businesses that are involved in a cartel to consider making a leniency application as soon as possible. "The first business to come forward and provide evidence of the cartel activities before CCCS commences a formal investigation will be given a full waiver of the financial penalty," she said.

"In addition, businesses that admit liability for their infringing conduct under the Fast Track Procedure will be eligible for a reduction of their financial penalty."

Correction note: This article has been edited for clarity.

Join ST's WhatsApp Channel and get the latest news and must-reads.

A version of this article appeared in the print edition of The Straits Times on December 15, 2020, with the headline 3 water feature maintenance firms fined over bid rigging. Subscribe