The Norwegian Competition Authority has imposed administrative fines on two construction firms of NOK five million and NOK two million, respectively, for illegal bid-rigging. The illegal cooperation took place in connection with a competitive public procurement to rehabilitate five bridges in North Trøndelag in 2007.
The two companies, Grunnarbeid AS and Gran & Ekran AS, shared price and other information before each submitted its own bid in the competition. The competition was held by the municipality of Steinkjer, and the two bids were the only ones received. The municipality reacted to the abnormally high prices, suspended the competition and contacted the Norwegian Competition Authority.
Had no intention to win
– The cooperation between the two construction companies led to a common understanding of who would submit the best bid. From the perspective of the municipality, the impression was created that the companies submitted two independent and competing bids. In fact, Gran & Ekran submitted its bid without any intention of winning the competitive procurement, according to director of investigations Eirik Stolt-Nielsen of the Norwegian Competition Authority.
The Norwegian Competition Authority is of the opinion that Grunnarbeid’s bid, which was relatively high priced, should appear to be reasonable and competitive.
Cooperation that restricts competition is prohibited under the competition law. The Authority concluded that the companies acted contrary to that prohibition. Grunnarbeid, therefore, was fined NOK five million whereas Gran & Ekran was fined NOK two million.
– The purpose of holding a competitive public procurement is to encourage competition among bidders, so that the body making the procurement can choose the bid that results in the most efficient use of resources. When bidders who appear to compete instead cooperate in this way, they eliminate the whole purpose of competitive public procurement, said Stolt-Nielsen.
Praise for the municipality’s alertness
The director of investigations praised the municipality of Steinkjer for having noticed the cooperation and informed the Norwegian Competition Authority. He encouraged procurement officials to be on the alert and to contact the Authority if they suspect bid-rigging.
– Procurement officials and others who work with procurement in the public sector play an important role in the fight against competition crime. They have a unique possibility to notice warning signs and unusual patterns, he pointed out.