CADE’s General Superintendence investigates alleged cartel in public bids conducted by municipalities in the state of Pernambuco

The General Superintendence of the Administrative Council for Economic Defense – CADE has initiated an Administrative Proceeding (PA 08700.004455/2016-94), on 28 July, in order to investigate an alleged cartel in public bids conducted by the municipalities of Recife, Olinda, Tamandaré, Macaparana, Bonito, Floresto and Tacaratu, in the state of Pernambuco. The public bids were related to the acquisition of supplies for offices and public schools.

The investigations, conducted by the Brazilian Federal Police - DPF, began in 2011 and resulted in the Invictus Operation, whose dawn raid warrants were realized in cooperation with Cade and with the General Comptroller Office (the current Ministry of Transparency, Inspection and Control).

The evidence shows the existence of an agreement between companies with the purpose of fixing prices and deciding the contracts of public bids in at least 7 municipalities in the state of Pernambuco, mostly related to the implementation of Federal Government’s public policies in the areas of education and social assistance.

With the establishment of the Administrative Proceeding, the defendants will be notified in order to present their defense. At the end of the Proceeding, the General Superintendence will issue an opinion regarding the conviction or the filing of the case, forwarding it for the final judgement of CADE’s Tribunal.

In case of conviction, the companies may be punished with fines ranging from 0,1% to 20% of their turnovers, while individuals involved may be fined with amounts ranging from 1% to 20% of the fines imposed to the companies.