General Superintendence suggests condemnation of two bid rigging cases

The General Superintendence of the Administrative Council for Economic Defense – CADE recommended, in two opinions published on 2 September 2014, the condemnation of nine companies for bid rigging. The cases involve the market of traffic surveillance radars in Jahu, in the state of São Paulo, and the market of building material in the city of Lages, in the state of Santa Catarina.

In the first administrative proceeding, no. 08012.008184/2011-90, six companies would have agreed the result in two public bids held in 2010 aiming the contracting of services of traffic support, signaling, monitoring, maintenance and supervision in the city of Jahu. CADE’s Superintendence verified that the price quotations and commercial proposals of the companies had several wording similarities and the same typing errors in two investigated bidding processes. These and other similarities, such as identical formatting of the qualification documents, indicate the conjoint development of proposals.

In the second administrative proceeding, no. 08012.006199/2009-07, three companies would have previously agreed their participation in a public procurement held in 2009 aiming the acquisition of painting and plumbing material to the municipal education system of the city of Lages. The General Superintendence verified that the companies presented proposals with identical formatting, with the same typing errors, and with regular price intervals.

In the two cases, the Superintendence also discovered that there was a friendly environment to conversations and information exchange among the charged parties, since it was proven that the companies had partners and representatives in common or with a family relationship among themselves. These behaviors are internationally recognized as bid rigging cartel indicatives, according to a study developed in 2009 by the Organization for Economic Co-operation and Development – OECD.

The cases are to be judged by CADE’s Tribunal. If condemned, the companies may pay a fine of 0,1% to 20% of their total turnover, besides other penalties established by law.