CADE convicts companies for bid rigging on urbanisation of favelas in Rio de Janeiro

On 17 April, the Administrative Council for Economic Defense (CADE) convicted the companies Queiroz Galvão, OAS (Grupo Metha), and Delta Construções, and 2 individuals for bid rigging. The conviction refers to the public procurement opened by the department of public works of the State of Rio de Janeiro (SEOBRAS) for engineering and construction services to urbanise the favelas of Complexo do Alemão, Complexo de Manguinhos, and Comunidade da Rocinha, in the State of Rio de Janeiro, from March 2007 to February 2008. 

The investigation began in November 2016, after a merger control agreement signed between CADE and the Federal Prosecution Services of Rio de Janeiro (MPF/RJ) with the company Andrade Gutierrez. 

According to the investigation, the parties involved in the violation imposed agreements for fixing price, conditions, and advantages in the tender, besides a market allocation scheme among the competitors. In addition, they shared competitively sensitive information, hindering the competitive procurement. The competitors exchanged information for 11 months. 

Alexandre Cordeiro, president of CADE, highlighted the importance of respecting procedural rules in a democratic state, since all are equal before the law, including the state itself in its many functions, especially within the persecutory scope. After an in-depth analysis of the evidence gathered, the proceeding regarding 10 individuals and 5 companies was dismissed, and the proceeding regarding the signatories of the Cease and Desist Agreement was suspended. 

On the other hand, CADE fined the companies Queiroz Galvão, OAS (Grupo Metha), and Delta Construções in more than BRL 20 million, while the fines imposed to the 2 individuals amounted to more than BRL 842 thousand. 

Access Case no. 08700.007776/2016-41