Competition Commission fines companies for rigging F1 tender

THE Competition Commission of Singapore (CCS) has fined a number of companies for colluding to rig tenders called for the Singapore Formula 1 Grand Prix and for an international school.

The companies in question are the Cyclect Group, consisting of Chemicrete Enterprises, Cyclect Electrical Engineering and Cyclect Holdings; HPH Engineering; and Peak Top Engineering. The CCS initiated investigations after it received a complaint in relation to the two tenders.

On April 23, 2015, Cyclect Electrical won a tender for electrical services for the Singapore Grand Prix after colluding with HPH and Peak Top, which submitted higher bids than Cyclect, the CCS said. The bids by HPH and Peak Top were 25-30 per cent higher than Cyclect Electrical's own bid. Chemicrete, a unit of Cyclect Group, also submitted a bid.

Meanwhile, for a tender that was seeking asset tagging services by GEMS World Academy, Chemicrete won the contract after seeking HPH's assistance in submitting a higher quote, the CCS said. In this case, the fake bid was 50 per cent higher.

The CCS has determined that the companies had infringed Section 34 of the Competition Act. It has fined Cyclect Group more than S$559,290 for the Formula One (F1) tender and S$12,000 for the GEMS Tender. The Cyclect group applied for leniency after providing the CCS with information to help with their investigations, which resulted in a discount in the fine levied. The discount for leniency is up to 50 per cent, said the CCS, without disclosing exact figures.

HPH was slapped with a penalty of S$28,128 for the F1 tender and S$5,000 for the GEMS tender, while Peak Top will have to pay a penalty of S$21,693 for the F1 tender.

The firms have a two month window to file an appeal should they decide to do so.

Toh Han Li, chief executive of the CCS, said: "Bid-rigging is one of the most harmful types of anti-competitive conduct as it distorts the competitive bidding process, thereby preventing businesses from getting the best value for their tenders. Tenderers must independently prepare their bids and refrain from participating in any discussion, coordination, or plan which is anti-competitive in nature."