he Netherlands Authority for Consumers and Markets (ACM) has launched an investigation into the procurement market for projects involving the renovation and maintenance of roofs. Mostly public procurement projects are involved. ACM received tip-offs about businesses that concluded possibly illegal arrangements prior to the tender processes. ACM recently carried out dawn raids at several firms, and requested information from the contracting authorities involved.
What is public procurement?
Public procurement involves a public body, such as a municipality, province or even the central government, announcing that it intends to have a project be carried out by a third party, for example, constructing a new highway, upgrading street lighting, or purchasing IT systems. Businesses are invited to submit bids. They compete with each other for the right to carry out such a project. The contract is awarded to the company that is able to carry out the project with the best price-quality ratio.
Why is competition important in public procurement?
Each year, the government spends EUR 73 billion on projects. However, there are companies that sometimes collude in order to reduce competition. For example, they could agree in advance which company gets the contract. The other companies then deliberately submit inferior bids. Alternatively, they could agree on minimum prices. These are all examples of violations of the Dutch Competition Act, and are thus illegal. Arrangements such as these lead to higher costs for the government, and, by extension, to less money for health care, education, and national defense, among other things.
What are the next steps in the investigation?
ACM protects competition in public tender processes. If a company violates the Dutch Competition Act, ACM is authorized to impose a fine. ACM could also come to the conclusion that the law has not been violated. However, if ACM does believe that that the law has been violated, the companies involved have the opportunity to tell their side of the story before ACM imposes a sanction.
Submit tip-offs about illegal arrangements
Do you have information that certain companies have made illegal arrangements? Or would you like to know whether or now certain practices are allowed? Contact ACM by filling out the tip-off form on our website.