On August 4, the Competition Council (KP) made a decision in which it stated that the construction companies SIA PK Serviss, SIA Koro būve and SIA Tavs laikmets had a prohibited agreements on the conditions for participation in private procurement, the KP announced at a press conference on Tuesday, August 16.
The infringement consisted of a prohibited agreement within the framework of a project organized by the private customer SIA Lyngson and co–financed by the European Union Structural Funds, where the cartel members exchanged information and agreed on the terms of participation in the procurement.
THE OBJECT TO WHICH THE FUNDING was APPLIed IS A Manufacturing BUILDING IN OLAINE THAT HAS ALREADY BEEN BUILT.
The detected infringement affected the fair and legal use of the funds allocated by the European Union structural funds in the amount of EUR 780,733.12. The money to be returned to the EU funds.
As a result of the actions of the cartel participants, Lyngson Ltd received aligned bids rather than bids made in genuine competition. The bidders exchanged commercially sensitive information on unit costs, thereby eliminating competition in the procurement between competitors.
As KP informs, SIA PK Serviss had agreed with the customer on a pre–arranged winning in the specific procurement.
«IT WAS CLASSIC CARTEL BUSINESS AS USUAL»,AT THE CONFERENCE SAID IEVA ŠMITE, DIRECTOR OF DEPARTMENT PROHIBITED ARRANGEMENTS.
She said that the construction companies agreed with each other on the terms of participation in the procurement, which manifested itself in SIA PK Serviss preparing financial offers for both SIA Koro būve and SIA Tavs laikmets, which were submitted as cover offers without a real desire to compete and win the procurement.
As the KP informs, during the investigation it was concluded that the customer did not organize procurement on a regular basis. Respectively, SIA Lyngson informed the negotiated winner of the procurement, SIA PK Serviss, about the potential bidders and involved in the preparation of the financial offer form in the procurement regulation annex.
The cartel member SIA PK Serviss advised the customer SIA Lyngson on how to reject offers submitted by other applicants.
Based on the information obtained as a result of the procedural activities and the initial concern that the procurement was not conducted in accordance with the legal norms, the Competition Council cooperated with the law enforcement authorities, providing the information obtained during the investigation of the case.
ACCORDING TO THE ABOVE MENTIONED, THE EUROPEAN PROSECUTOR’S OFFICE INITIATED CRIMINAL PROCEEDINGS, AS A RESULT OF WHICH THE CUSTOMER – SIA LYNGSTON – REFUNDED THE CO–FUNDING RECEIVED BY THE EU IN THE AMOUNT OF EUR 780,733.12.
The Competition Council has applied fines to the companies involved in the violation. The fine is calculated as a percentage of the net turnover in the previous financial year.
«This cartel case is a signal to private companies that competition law applies to their purchases too. As you can see, cartels and suspicious situations are not only in public procurement, but also in private procurement,» said Nata Lasmane, Director of the EU funds audit department at the Ministry of Finance, at a press conference.
As Competition Council admitted, the investigation was helped by the fact that two of the three companies involved in the cartel – SIA PK Serviss and SIA Tavs iepags – cooperated and admitted their guilt. Thus, the legal dispute in the case was ended, with the companies agreeing to the facts established by the KP, as well as undertaking not to appeal the decision of the KP.