Tribunal ‘yes’ to penalty agreed for bid-rigging

THE Competition Tribunal has confirmed a settlement agreement between the Competition Commission‚ Aztec Components and Lambda Test Equipment‚ following its initial suspicions that bid-rigging might be more prevalent in the telecommunications industry than the commission’s investigation revealed.

Aztec and Lambda admitted last year that they had rigged a bid for a tender issued by Broadband Infraco‚ a state-owned enterprise‚ in 2010.

The tender was for the supply of production equipment that measured and tested links on longdistance telecoms networks during commissioning‚ repairs‚ maintenance and upgrades.

The tribunal requested additional information from the commission and the parties late last year‚ asking the watchdog to probe whether the two firms had not been involved in other joint bids in the telecoms sector.

It did‚ however‚ approve the settlement during the second week of December‚ after receiving information from the two parties. The companies offered to pay an administrative penalty of R100 000 each for contravening the Competition Act.

Tribunal chairman Norman Manoim raised his suspicion of wider bid-rigging during a hearing at the start of December‚ at which the tribunal was asked to confirm the settlement.

At the hearing‚ the tribunal was told that neither company had won the tender and that the initial tender‚ valued at R12-million‚ was withdrawn and readvertised for R6.2-million. It was then won by a firm called Willcom. It also emerged at the hearing that the two companies’ tenders were identical.

The tribunal approved the settlement on the grounds that the firms had confessed to bid-rigging and were prepared to pay the administrative penalty agreed with the commission.

Manoim said earlier that the tribunal’s recent experiences with the construction industry showed that cover bids were not unknown in South Africa. The settlements with the construction firms were reached in terms of the construction fast-track settlement process.