Tatarstan OFAS exposed a cartel on the market of reclamation works

The Office of the Federal Antimonopoly Service in the Republic of Tatarstan handed down an opinion on a case about an oral agreement between the bidders of an auction for capital repair of hydraulic structures and reclamation works in Tatarstan.

Unlawful actions of several entities resulted in the minimum percentage of the contract price reduction at the auction: by 0.5-2.5% from the initial price (costs).

Such passive conduct of the auction bidders, including: “Stroialliance” Ltd., “HydroTekhSpetsStroi” Ltd., “KamaStroiAgroService” Ltd., “Laishevsky “Meliovodstroi” Ltd., “Agroinveststroi” PKF” Ltd., “StroiAgroSoyuz” Ltd., “Kukmorsky “Meliovodstroi” Ltd., “Melioratsia” Sabinskaya PMK” Ltd., “Melioratsia-Stroi” Ltd., “NSPG” Ltd., “Stroimarket” Ltd., “Buinsky “Meliovodstroi” Ltd., indicates an intention to conclude the contract at the maximum lowest price.

The bids were filed from the same IP-address, which for independent bidders is impossible due to technical reasons, even with the same provider. Checking up of the bid files revealed matching of the name of the account that created and changed a file, and the size, date and time of creating files.

Explaining the fact, a representative of the respondents clarified that had concluded contracts with the auction bidders for the services of supporting participation in procurement. According to the respondent explanations, the matching happened because the bids were filed from the respondent’s office due to an allegedly weak Internet-signal that had entities located outside the city.

The used IP-address was allocated to “Tatmeliovodkhoz” Department” Federal State Budgetary Institution that has an office in the same building on the basis of a lease agreement with “Tatmeliratsia” Ltd. The office, however, is two floors lower that the office of the representative of the respondents; in this case matching of IP-addresses is impossible.

The Commission of the antimonopoly body was interested whether the respondents’ representative had professional experience and qualification in supporting procurement participation. The Commission, however, did not receive any response to its requests, apart from a qualification advancement certificate dated later than the dates of concluding and executing contracts with the respondents. The respondents’ representative did not enter into similar agreements for such services with other organizations; therefore, the representative did not have work experience in this field.

Analysis of information from zakupki.gov.ru helped establishing sustainable relations between the companies in the course of public procurement throughout 2013-2016. In this case one may talk about joint operations, determining common pricing and commercial policy related to joint participation in 67 procurements with various combinations of the auction bidders.

For instance, in 2013-2015 the auction bidders used the same IP-address to file bids; also the fact of matching аn account that created the bid file, the time and date of creating the files is ascertained. Therefore, the respondents’ arguments are refuted with sustainable relations between all respondents long before concluding contracts with the above individual.

The minimum reduction of the contract price, using the same IP-address to file bids, particularly, in other procurements, a similar conduct model in each auction – all this means that a competition - restricted agreement was concluded that resulted in maintaining prices at auctions.

Also, a cartel agreement, that leads to maintaining particular price at auctions, increases income. Tatarstan OFAS estimates that implementing the agreement the overall income of its participants as a result of winning auctions and concluding government contracts reached around 300 million RUB.

Thus, the auction bidders violated Clause 2 Part 1 Article 11 of the Federal Law “On Protection of Competition” by concluding an agreement that resulted in maintaining prices at 13 electronic auctions.