• The companies would agree with each other on the quotations they would submit for tenders to help each other win contracts
• The ruse was discovered after a tip-off in 2017, which led to investigations by the Competition and Consumer Commission of Singapore 
• Affected parties have a right to take legal action against the companies, CCCS said

SINGAPORE — Over a period of 10 years, three swimming pool and water feature maintenance companies colluded with one another when bidding for hundreds of tenders to help each other win contracts. 

On Monday (Dec 14), they were fined a total of S$419,000 by the Competition and Consumer Commission of Singapore (CCCS). 

The three companies — CU Water Services, Crystalene Product (S) and Crystal Clear Contractor — rigged 521 tenders from 220 clients, including hotels such as Shangri-La Hotel and Park Royal on Kitchener Road and condominiums such as Adam Park Condominium and Parc Stevens, between 2008 and 2017. 

CCCS said during a media briefing that it began investigating the three firms in September 2017 after receiving a tip-off in July that year. 

The investigations found that the bid-rigging occurred separately between CU Water and Crystalene, and between CU Water and Crystal Clear.

Bid-rigging occurs when two or more suppliers or purchasers collude on bid submissions for tenders. One party may agree to put in a high bid on one tender so that the other can win it, and then they reverse roles on the next tender so that they can take turns to win the contracts.

One company might also agree not to participate in certain tenders so that the other can win the contract. 

In November 2017, the commission conducted a round of unannounced inspections at the parties’ premises and interviewed key personnel. 

CCCS discovered a “systematic pattern” involving, for example, one company intentionally quoting higher prices to give another company a higher chance of winning the bid. 

The requesting party  — the one that wants to win the bid — would often specify a price for the supporting party to quote, and the supporting party will then provide a quote that it believes to be higher than that of the requesting party. 

Email screenshots presented to the media showed the companies sharing details of their customers with each other and asking each other for supporting quotations.

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.”

Even if a party was asked by a potential customer to procure additional bids, the parties should have left it to their competitors to independently decide on their own bids, the commission added. 

The penalties imposed on the companies are: 

• CU Water: S$308,680

• Crystalene: S$41,541

• Crystal Clear: S$68,793

COMPANIES THAT SOUGHT LENIENCY RECEIVED LOWER PENALTIES 

Shortly after investigations commenced, Crystalene and Crystal Clear applied for leniency under CCCS’ leniency programme, while CU Water did not do so. 

The programme affords lenient treatment to businesses that are part of a cartel agreement or concerted practice when they come forward with information on their cartel activities and cooperate with investigations. 

Under this programme, businesses eligible for leniency can be granted total immunity or be granted a reduction of up to either all or half of the financial penalties, where applicable. 

An additional discount of 10 per cent was applied to further reduce Crystalene and Crystal Clear’s financial penalties because they admitted to their misconduct and cooperated with CCCS’ investigations under the Fast Track Procedure, where parties admit liability so the investigative procedure is more efficient and resources are saved. 

Asked how affected customers can seek compensation from the companies for having paid non-competitive rates, Ms Winnie Ching, the director of the legal division at CCCS, said that they would have to take matters to court. 

“Affected parties have a right to take legal action if they can prove they have sustained damages as a result of the conduct,” said Ms Ching.