FAS opened a cartel case against bid-rigging at auctions organized by the Ministry of Defence

The antimonopoly body exposed an anticompetitive agreement between companies designed to maintain prices at auctions organized by the Ministry of Defence.

In 2015 the Ministry of Defence conducted several open auctions for sanitary maintenance, technical and all-inclusive services of barracks and quarters in military communities, and the housing stock of universities and other institutions subordinate to the Ministry.

Every auction was won by one of the following nine legal entities who are involved in the suspected anticompetitive agreement: “Component” Ltd., “Megaline” Ltd., “Coralclean” Ltd., “Millenium Clean” Ltd., “Bely Medved” Ltd., “Ecobalt” Ltd., “ASP” Ltd., “Spetsresource” Ltd. and “Ruscomplex” Ltd.

The initial maximum contract price at all auctions did not exceed 1.5%. Therefore, the government contracts for the total sum over 18 billion RUB were concluded with an insignificant reduction of the initial price.

“Bidders’ refusals to compete at such large auctions lead to inefficient spending of budgetary funds”, commented the Head of FAS Anti-Cartel Department, Andrey Tenishev.

FAS opened a case against the above economic entities upon signs of violating Clause 2 Part 1 Article 11 of the Federal Law “On Protection of Competition”.

“Budgetary funds must be allocated efficiently, especially when it concerns national security. Collusions result in unnecessary waste of budgetary funds, which adversely affects the economy”, summed up Stats-Secretary, Deputy Head of FAS Andrey Tsarikovskiy.