Firms shared documents to submit rigged tender bids

Malaysia's competition watchdog has fined eight businesses a total of RM1.5m (£287k) for bid-rigging offences.

The Malaysia Competition Commission (MyCC) said the firms shared company stamps, financial documents, certificates, and letterheads to submit rigged bids for IT contracts let by the National Academy of Arts, Culture and Heritage of Malaysia (ASWARA).

Two cartels were found to have engaged in rigging public procurement bids for ASWARA IT projects after an investigation was launched in 2017. 

The sharing of documents enabled firms to prepare and submit the tender documents on behalf of supposedly rival enterprises to ASWARA.

MyCC began investigating following a tip-off. Eight companies were collectively fined RM1,548,192.35 (£286,592.78) for infringing Section 4 of the Competition Act 2010, and may have their registration suspended.

The initial project investigated, worth RM467,727 (£86,442), involved integrated power supply system equipment and data backup. MyCC’s investigation revealed parts of Caliber Interconnect’s request for quotation (RFQ) documents had been prepared by Tuah Packet, and representatives from both companies had attended a “project kick-off” meeting, despite Caliber Interconnect winning the contract in 2016.

MyCC found there had been an oral agreement in which the losing enterprise would receive subcontracting work from the winner.

Tuah Packet and Aliran Digital also had an agreement for the former to use the latter’s name to participate in a tender worth RM939,852 (£173,698) in 2015, but failed to complete the documents in time. This project was for computing equipment and software for 2D animation laboratory learning, as well as graphics production and a HD projector. 

Collusion on another contract in 2015 worth RM475,000 (£87,786) between Tuah Packet, Aliran Digital and ViaMED was also discovered. This project was for ICT hardware for the faculty of animation and multimedia.

Tuah Packet submitted RFQ documents under ViaMED’s name, but did not win the tender. 

Another project in 2015 worth RM42,786.90 (£7,917.02) found Tuah Packet won the RFQ under ViaMED’s name and awarded 5% of the contract value to ViaMED as a monetary reward. The project was for maintenance of “Active Directory”, an administrative service created by Microsoft.

A second cartel was also discovered between Novatis, Basenet, Venture Nucleus and Silver Tech, who shared names in order to submit documents. This practice enabled Novatis to gain an upper hand over genuine bidders, and submitted three other offers to ASWARA under the guise of three separate enterprises. This did not result in the cartel winning the tender, however.

Iskandar Ismail, CEO of MyCC, said: “Tenders or quotations submitted as a result of collusion or cooperation between bidders for the same tender restrict competition and create a false impression that the procurement process was fair. Therefore, the conduct of the said enterprises is severely harmful to the process of competition and causes losses to the government, thus resulting in leakages to public coffers.

“This decision is a reflection of MyCC’s commitment to continue cracking down on enterprises that collude to drain public funds through bid rigging activities,” Ismail continued.

“At this juncture, we are also investigating 500 companies suspected of being involved in rigging the bidding process of contracts worth RM2 billion [£370.2m] across industries. We will leave no stone unturned and be resolute in this stern action. Expect more decisions to follow suit.”

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