Competition Tribunal clears WBHO of tender rigging
The tribunal says the Competition Commission failed to prove that a 2006 meeting between WBHO and Group Five was meant to rig a Sanral tender
The Competition Tribunal has dismissed a collusive tendering case against construction firm WBHO Construction relating to a Johannesburg road tender.
In its 2015 referral to the tribunal, the Competition Commission alleged that WBHO had colluded with Group Five Construction by fixing contractual conditions related to the N17 link road between New Canada and Soccer City.
It alleged that the two companies had agreed on a preferred set of contractual conditions for the SA National Roads Agency Limited (Sanral) tender. The commission alleged that the two companies met in July 2006 under the auspices of the SA Forum of Engineering Contractors (Safec) to rig the tender.
“On the commission’s version, the companies met to discuss their dissatisfaction over the tender’s contractual conditions. They agreed on how Sanral should restructure these with the effect of assigning less risk to the contractors and more risk to Sanral,” the tribunal said on Thursday.
While Group Five applied for and was granted leniency, WBHO — whose primary focus is in building construction, civil engineering and roads and earthworks — contested the allegations.
“It argued that there had been confusion regarding the allocation of risk on the project and that mutual concerns and dissatisfaction in this regard had been discussed at the meeting. The companies decided to send a letter to Sanral and the Johannesburg Roads Agency via Safec to clarify the contract’s allocation of risk and to voice concerns,” the tribunal said.
The tribunal said the commission had, however, failed to prove that there was an agreement between the two companies to align their bids for the tender.
“We were given no reason by the commission to treat this meeting as one that was any more than a tender clarification-seeking meeting,” the tribunal said.
The commission also failed to prove that the companies exchanged information at the meeting to subvert a competitive process. “There may well be situations in which attending a meeting to discuss the difficulties parties have with a tender should be considered illegal, but the facts of this case do not support this conclusion,” it said.