Three water feature maintenance companies fined for cartel-style bid-rigging activities

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

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

The companies - 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.

The illegal bid rigging concerned 521 contracts and 220 customers, and took place on multiple occasions between August 2008 and June 2017.

Some of the customers included hotels like the Shangri-La and Grand Copthorne Waterfront, as well as the management corporations (MCSTs) and managing agents of condominiums across the island.

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 "leniency discount" to have their financial penalties reduced because they came forward to share information on the cases.

The competition watchdog began looking into the three companies' practices after a tip-off by a whistleblower 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 a round of unannounced inspections at the three companies' premises, and interviewed key personnel. At that point, it received leniency applications from Crystal Clear and Crystalene, while CU Water did not apply for leniency.

Investigations later found that there were agreements between CU Water and Crystalene, and separate agreements 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 company to use in the supporting quotation.

These arrangements meant that 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.

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

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 also urged businesses that are currently involved in a cartel to consider approaching CCCS to make a leniency application as soon as possible.

"Under the leniency programme, 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.

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

Correction note: This article has been edited for clarity

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