The Netherlands Authority for Consumers and Markets (ACM) has fined two roofing contractors for distorting competition in a tender process. An Amsterdam-based firm wanted to get the best price for a roof renovation project, and therefore set up a tender process. The firm invited four contractors to submit bids, thereby encouraging them to compete with one another. Two roofing contractors, Schadenberg and Van Venrooy, secretly coordinated their bids prior to the tender process. Bid-rigging agreements are considered a cartel, and are therefore illegal. That is why these two roofing contractors have been fined 24,000 euros.
Martijn Snoep, Chairman of the Board of ACM, explains: ’If an organization sets up a tender process, they should be able to have confidence that all bidders submit their bids independently of their competitors. Only then will the tender process be fair. The rules apply to all contracts, large and small ones. These two roofing contractors have deliberately misled the client. As a result of thereof, the competitive process was distorted.’
Tender processes must take place in a fair manner
In tender processes, clients invite several businesses to submit bids for a specific contract. These businesses must determine their bids independently of the other bidders. Each business must decide (on their own and without any certainty about what the others will do) at what price and under what conditions it is prepared to do the job. Businesses cannot make any price-fixing agreements or exchange information about whether or not they will submit a bid, or about the price or conditions they will set. If they do, competition will be restricted, and the client will get an offer that is not competitive. As a result, the client will pay more or will get suboptimal conditions.
ACM and tender processes
ACM ensures that markets work well for people and businesses. Tender processes must take place in a fair manner. Competition rules apply to all companies, large and small alike. Businesses that rig their bids can be fined by ACM. Interested in more information about what you should keep in mind when submitting bids or when setting up tender processes? Visit our site with information about tender processes (in Dutch).
ACM works together with PIANOo , the Dutch Public Procurement Expertise Centre, to give advice to clients in tender processes. PIANOo helps contracting authorities professionalize their procurement processes by giving advice, providing tools, and practical tips.
Please report distortions of competition
Do you have any indications that certain businesses distort competition? Please report them to ACM.
20-7-2020 Fine on two roofing contractors (in Dutch)