CPC sanctioned Total LC Ltd and the consultant S.I.I. for their participation in a bid-rigging cartel for the manipulation of public procurement procedures
By Decision № 1058/10.10.2024 the Commission established committed infringement of art. 15 of the LPC and art. 101 of the TFEU and imposed pecuniary sanctions in total of 56 590 BGN on Total LC Ltd and S.I.I.
The established infringement constitutes a bid-rigging cartel for the manipulation of 22 public procurement procedures, committed by Total LC Ltd and Nay 2015 Ltd, together with their common consultant, between 31.03.2020 and 16.09.2021. It has as its object the prevention, restriction or distortion competition on the wholesale markets of flowers, decorative plants and planting material as well as landscaping services on the territory of the country.
The infringement has been committed with the active assistance of the common consultant of the participants in the procurement procedures through which they have exchanged information about their market behavior. The consultant has prepared and submitted all the documents in the procedures taking into account the established principle for the allocation of the tenders between them. Although the consultant is not a participant in the award procedures, he is nevertheless an accomplice to the infringement and bears the same liability as the other infringers.
The infringement constitutes a bid-rigging cartel both under national law and under European Union law, since it may significantly affect the pattern of trade between Member States. In the course of the proceedings, the Commission cooperated with the European Commission and coordinated the decision in fulfillment of the requirements of Regulation (EC) No 1/2003 on the implementation of the rules on competition laid down in Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU).
The Commission set pecuniary sanctions for the committed infringement in the amount of 10% of the relevant value of sales of the undertakings with an increase for deterrence of 10% for committing an infringement under art. 101 of the TFEU.
The proceedings have been initiated ex officio following a signal from Gabrovo Municipality, which expressed doubts and presented evidence for bid rigging a tender for the supply of flowers and decorative plants. This is another case in which CPC has been alerted by a procurer who has established in the course of a procedure conducted by him some of the indicators of manipulation included in the Guidelines for Fighting Bid Rigging in Public Procurement, adopted in 2020. They are published on the website of the CPC and are a valuable assistant to contracting authorities in organizing and conducting public procurement procedures.
The adoption of the Guidelines and the trainings provided to contracting authorities in recent years are in line with the Commission's antitrust priorities for fighting bid rigging. The Commission's efforts in this area lead to improved cooperation with contracting authorities, with the result that contracting authorities are increasingly identifying indicators of manipulation of their procedures and turning to the Commission. The result of this cooperation is the increased number of opened proceedings and preliminary investigations in bid-rigging cases.
Bid-rigging leads to eliminating the mechanisms of effective competition, artificially increasing prices, lowering the quality and level of innovativeness of the offered goods and services and/or limiting supplies, thus damaging the interest society has in receiving public services of good quality. Therefore, preventing, detecting and sanctioning bid-rigging is essential for the efficient use of public funds, which is why it has been a priority in the antitrust activities of the CPC in recent years. Another step in this direction is the upcoming seminar for contracting authorities organised by the Organisation for Economic Co-operation and Development and the CPC in November. Information for it will be published on the Commission's website.
The full text of the Decision is available in the public electronic register of the CPC: https://reg.cpc.bg/