UK Competition and Markets Authority finds cartel in construction

This may not come as a surprise to anyone working in this area of practice, but the CMA has provisionally found guilty two companies operating in the construction sector, specifically in the pre-cast concrete drainage sector. These two companies have admitted being part of a cartel whereas a third one is also under investigation but has not admitted any wrongdoing.

Stanton Bonna and CPM together had 90% plus of the market from 2010 and have agreed to pay fines as part of their settlement for their price coordination practice.

It remains to be seen if the companies will be debarred from future public contracts based on Reg. 59 PCR 2015/Art. 59(4) of Directive 2014/24/EU but I suspect the grounds are too narrow to allow for such interpretation.

Links I Liked [Public Procurement]

1. There's an "official" English translation of the Danish public procurement law. This reminds me of a project idea I had a couple of months ago of translating into English a number of very different public procurement laws. Thanks Carina for the heads up.

2. Court of Auditors publishes Special report no 17/2016: The EU institutions can do more to facilitate access to their public procurement.

3. A public works cartel is found out in Spain (Spanish only).

4. Change rules around public contracts to let charities compete fairly, Big Society Capital tells government. For once, the proposed headline changes are reasonable and are not what we usually see from vested interests (ie, tilt the playing field in my favour). Having said that, "prior market engagement" gives me shivers. Report itself can be found here.

5. Single-Supplier Framework In London – Guaranteeing Value Will Not Be Easy. Agreed. My views on framework agreements in general are bearish and especially single supplier ones.

Portuguese Competition Authority fines cartel operating in public procurement

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

- 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.