CADE convicts cartel members in procurements for public works in Juazeiro do Norte (CE)

The cartel impacted engineering services in schools of the municipality. The cartelists are to pay fines amounting to BRL 1.1 million.

Published in Mar 17, 2023 02:45 PM Updated in Jun 15, 2023 02:31 PM

On 8 March 2023, the Administrative Council for Economic Defense (CADE) found the companies Caenge, Construtora ASP, Construtora J. Filho, Brito Construções, Construtora São Bento, and seven individuals guilty of cartel practice in eight government procurements for engineering services for state schools in Juazeiro do Norte, state of Ceará. The cartelists are to pay fines amounting to BRL R$ 1,134,701.99.

The Office of the Superintendent-General launched the administrative proceeding in October 2019. Based on evidence forwarded by the 16^th Federal Court of Ceará, the unit identified that the companies engaged in collusive behaviour in procurement processes held in 2009.

During the discovery stage of the case, the team uncovered a series of indirect pieces of evidence that, together, prove the existence of the cartel and its modus operandi, such as the standardization in the wording of the documents written and submitted by the companies in the procurement processes, the same misspellings, equal prices in the proposals for several items, and familial and close ties between the individuals associated with the investigated companies.

According to Commissioner Gustavo Augusto, rapporteur of the case, the investigations prove that the construction companies and individuals involved met illegally to previously agree on prices and adjust benefits in the government procurements to limit and fake the existence of free competition and abusively increase their profits.

‘To harm the application of public resources reserved for education, especially in a municipality of notorious economic poverty, is one of the most perverse ways to harm the economy, as it robs the future of generations to come, condemning entire populations to perpetual economic and intellectual poverty and taking away opportunities of professional growth from those that need them the most,” said the rapporteur.

In addition to the fines, the Administrative Tribunal of CADE also forbade the companies and individuals found guilty from contracting with official financial institutions and participating in federal, state, and local government procurements for the next five years.

Access Case no. 08700.000269/2018-48.