Widespread Cartel Collusion Squeezes Road Construction Budgets: Federal Cartel Office Doles Out Millions in Penalties
Unlawful Collaboration in Infrastructure Projects: Federal Cartel Office Levies Hefty Million Euro Penalty - The Competition Authority imposes a hefty financial penalty
Andreas Mundt, the head of Germany's Federal Cartel Office, spilled the beans in a stark revelation. The Bonn authority, he explained, had discovered a web of illicit agreements between road construction companies, disturbingly active between 2016 and 2019.
Before the tenders, it was a done deal who'd bag each one, Mundt revealed. In numerous instances, other firms submitted fake bids with a pre-set minimum agreed upon in secret.
"Combat fraudulent competition and maintain economic efficiency in public sector procurement," Mundt stressed gravely. Such shady deals could result in substantial damages, with all citizens bearing the brunt eventually.
In 2018 and 2019 alone, four firms divided up road construction clients in Saxony, Thuringia, and Saxony-Anhalt, hinting at their collusion. A coded language was used at times to pinpoint which tenders the firms were actively participating in and which phony bids were on the table.
Troublingly, yet another set of four companies were found to have colluded in road construction tenders in Brandenburg and Saxony-Anhalt between 2016 and 2019. In some cases, they even teamed up in Mecklenburg-Vorpommern. One of these companies was, disconcertingly, involved in both scandals.
The contracts ranged from simple road repairs to the supply of bitumen emulsion or gravel. They typically involved contract volumes between 40,000 to 200,000 euros.
Joined by the Düsseldorf Public Prosecutor's Office, the Federal Cartel Office conducted raids in 2019. One company stepped up and cooperated under the leniency program, aiding in uncovering the shady deals.
- Federal Cartel Office
- Millions in Fines
- Illegal Collusion
- Road Construction
- Andreas Mundt
- Bonn
- Saxony-Anhalt
Illicit cartel agreements in road construction across multiple German states, most notably involving bid rigging and customer allocation, have proven to be damaging to public contracting efficiency and wallet-emptying for taxpayers. The recent crackdown on such behavior sees seven firms fined €10.5 million, with more probes potentially on the horizon.
The Federal Cartel Office, headed by Andreas Mundt in Bonn, has issued millions in fines to seven companies found to be part of a widespread collusion in road construction across different German states. Such illegal agreements, which include bid rigging and customer allocation, have been destructive to the economic efficiency of public sector procurement, potentially causing substantial financial loss to the public, including the vocational training industry, manufacturing, finance, and the business sector.
