CADE recommends conviction for bid rigging in civil construction

The Office of the Superintendent General at CADE (SG) recommended the conviction of 39 companies and 17 individuals for cartel formation in the railway engineering sector. The group coordinated practices in civil construction contracts of bridges and viaducts for the implementation of the North-South Railroad (FNS) and the West-East Integration Railroad (FIOL).

The investigation identified the existence of a cartel implemented from 2000 to 2014 through agreements of price-fixing, market division, and formation of consortia among competitors, suppression of proposals by submission of cover proposals, exchange of competitively sensitive information, as well as conditions, advantages, and abstention from participation in public procurements of Valec - Engenharia, Construções e Ferrovias S.A., aimed at frustrating its competitive nature.

Over time, the illegal agreement changed, becoming more complex as new participants joined the scheme to split the lots of more complex works. Such anticompetitive dynamic directly affected at least seven public procurements, totalling BRL 9.7 billion intended for the construction of the FNS and FIOL railroads.

The Tribunal of CADE will analyse the case and assign it to a Rapporteur for a final decision. If convicted, the companies may be fined up to 20% of their gross revenue, and individuals are subject to fines of up to 20% of the amount imposed on the company.

Access Cases No. 08700.001836/2016-11 and 08700.003153/2022-47.