Competition watchdog fines two contractors S$4.6 million for rigging People’s Association tenders

Two contractors found to have engaged in bid-rigging for public-sector tenders were dealt fines totalling S$4.6 million from the Competition and Consumer Commission of Singapore (CCCS).

Trust-Build Engineering & Construction (TB) was fined around S$4.3 million, and Hunan Fengtian Construction (HNFT) was fined S$349,350, CCCS said in a Friday (May 23) statement.

Investigations showed that the two had colluded to rig tenders relating to construction projects at three community clubs in Bukit Batok, Cheng San and Eunos.

The total value of the tenders, which the People’s Association (PA) called for in 2022, was around S$56 million.

While neither party was awarded any of the tenders, the competition watchdog found that their conduct “eliminated the competitive pressure between the parties to submit their best offers to PA”.

CCCS said: “Even though none of the PA tenders were awarded to either of the parties... such bid-rigging conduct has the potential to give the false impression that the bids received from the parties were genuine and competitive.”

The bid-rigging involved HNFT preparing TB’s tender submissions and proposing TB’s bid prices for each PA tender.

HNFT purported to compete against TB for the tenders, despite being aware of TB’s likely bid prices and the contents of TB’s tender submissions.

“Consequently, TB and HNFT did not independently determine their respective bids for the PA tenders. This undermined a fundamental principle of competition law, which is that businesses must act independently when determining their conduct on the market,” CCCS added.

The investigations began in July 2023, with raids carried out at both parties’ businesses in November of that year. The CCCS procured evidence from sources, including both contractors’ personnel, that revealed three instances of bid-rigging.

As part of the legal process under the Competition Act 2004, CCCS in October 2024 issued the parties a written notice setting out the basis for its decision.

The competition watchdog said each party submitted written representations, which it considered before deciding to issue the infringement decision.

As the PA had flagged the potential bid-rigging to CCCS before the tenders were awarded, both TB and HNFT were excluded from the tender evaluations.

In imposing financial penalties, the CCCS considered factors including each party’s relevant turnover, the nature and seriousness of the infringement, as well as aggravating and mitigating factors.

CCCS chief executive Alvin Koh said: “CCCS emphasises that bid-rigging undermines fair competition, distorts the regular operation of market forces, and prevents customers from obtaining genuine and competitive offers. In the context of public procurement where public funds are used, taxpayers are the ones who ultimately pay the price of such infringing conduct.”

Koh added that the CCCS offers a leniency programme that allows parties involved in bid-rigging to come forward with information about the anti-competitive conduct in question, and receive a full waiver or substantial reduction in financial penalties.

Individuals with information on cartel activity in Singapore who provide such information to the CCCS may receive monetary rewards of up to S$120,000 under its whistle-blowing scheme, he said.

Source: The Business Times © SPH Media Limited. Permission required for reproduction.

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