OREANDA-NEWS. October 23, 2009. The Office of the Federal Antimonopoly Service in the Tyumen region (OFAS Russia) found that bidders - "SibUniversal" Production Commercial Firm" Ltd. and "Atlantis" Ltd. - were engaged in collusion and violated the antimonopoly legislation (Clause 2 Part 1 Article 11 of the Federal Law "On Protection of Competition"), reported the press-centre of FAS Russia.

The bid-rigging collusion was reported to the Tyumen OFAS Russia by the State Procurement Department of the Tyumen Region. In its letter the authorized body reported lack of competition between the companies that file the auction bids.

"SibUniversal" Production Commercial Firm" Ltd. did not bid for the first lot and allowed "Atlantis" Ltd. to win. In its turn, "Atlantis" Ltd. was not active in the second lot, accordingly giving way to "SibUniversal" Production Commercial Firm" Ltd. Such actions of the companies indicated that the lots were allocated between the bidders in advance.

As explained by Igor Veretennikov, the Head of the Tyumen OFAS Russia, "filing bids for several lots, while having a possibility to execute a contract for only one of them, a company takes a risk. Failure to execute a government contract includes the company in the register of unfair suppliers and the company is not allowed to participate in competitive bidding for two years. Also by filing the bids and not being active at the auction bidding for various lots, a bidder creates a veneer of competition and raises suspicion of colluding with other bidders".

As a result, the actions of the bidders limited savings of the Tyumen regional budgetary funds from the auction to the minimum. The government contracts were signed at the prices only 0.5 % below the original maximum price.

The companies were issued a determination to exercise actions towards restoring competition. They also can be fined under Article 14.32 of the Code of the Russian Federation on Administrative Violations for exercising competition-restricting concerted: for legal entities - from one hundredth to fifteen hundredths of the proceeds gained by the violator from selling the goods on the market where the administrative violation occurred.

The antimonopoly body warned the respondents that they could be relieved from liability if they were to acknowledge their "guilt" but the companies did not take advantage of that.

Reference:
Clause 2 Part 1 Article 11 of the Federal Law "On Protection of Competition" prohibits competition-restrictive agreements or concerted actions between economic entities, in particular, increasing, reducing or maintain prices at tenders or auctions.