The Portuguese Competition Authority has just nailed a cartel operating in public procurement.
The 5 Portuguese companies convicted were fined a total just over €800,000. They were found guilty of price-fixing tenders in a number of procurement procedures launched by the Parque Escolar Secondary School Modernisation Programme in 2009-2010 for the supply and assembly of pre-fab modular constructions used as temporary classrooms. The companies have waved their appeal rights in exchange for a 10% reduction on the fine.
As usual the cartel was discovered by a complaint/insider blowing the whistle to the authorities. Personally I find it surprising that the companies collaborated with the investigation, so perhaps they considered that after the proverbial horses had bolted there was not much else to do rather than damage control.
Although I cannot claim to be an expert in the pre-fab modular construction business, could it be that this cartel was operating in tenders launched by other contracting authorities? The decision appears to be restricted to the procedures launched by Parque Escolar and I have no idea what is their representativeness in terms of market share for pre-fab modular construction.
There are other things I would love to know but cannot find in the press release and the decision's text is yet to be published:
- Was the cartel's operation facilitated by the obligation for contract information to be published on the national database base.gov.pt?
- If the cartel was operating in 2009 and 2010, why did the investigation process only start in January 2014?
- Who came forward? One of the cartel members or an aggrieved (ex-)employee?
I am not aware of the PCA finding anti-competitive practices in procurement before, (correction: there is at least another decision from 2011 related with procurement) but it is good to know they are paying attention to our patch.
Oh, and the PCA is putting up an international conference in October.