Three BiH Companies Fined Over 200,000 KM for Price Manipulation

(Patria) - The Competition Council of Bosnia and Herzegovina has fined three companies over 200,000 KM after finding that they manipulated prices on a tender for the rehabilitation of a local road in Breza in order to eliminate competition, reports Capital.

For violating the Law on Competition, "Ado-Trans" from Visoko was fined 68,295 KM, "Komgrad-Ze" from Zenica was fined 73,171 KM, and the company "Roco-Commerce" from Livno is obliged to pay 68,334 KM.

Namely, in February 2023, the Breza municipality issued a tender for the rehabilitation of a section of the local road Breza - Mahmutović Rijeka, with an estimated value of 307,692 KM.

A total of six bids were received, including those from the aforementioned companies.

The Competition Council's decision states that they mutually agreed and coordinated a business strategy that eliminated other bidders from this tender via an e-auction.

More specifically, "Roco-Commerce" and "Komgrad-Ze" offered 175,000 and 150,000 KM at the auction, respectively, which is 50.54 and 42.29 percent lower than their initial bids, a drop that none of the other bidders could match.

However, when they were supposed to sign the contract, both refused, so the job went to the third-placed bidder, "Ado-Trans", which did not change its bid at the e-auction and which amounted to 302,468 KM.

"The bidders 'Komgrad-Ze' and 'Roco-Commerce' quickly and unnaturally lowered their bids, then withdrew without submitting the qualification documentation within the legal deadline.

In this way, they confused the other bidders, leaving them no room to act, while simultaneously clearing the path for the company 'Ado-Trans' to be declared the most favorable bidder with a bid price without the e-auction," the decision states.

It adds that "Ado-Trans", which initially offered a market price that was profitable, did not participate in the e-auction nor planned to, because it knew that the two partners in this agreement would lower their bid prices below market levels and then withdraw.

"It was proven in the proceedings that all three business entities knew each other well and legitimately cooperated on other occasions and in other procedures, just as it was proven that the same person submitted the bid for the bidders 'Ado-Trans' from Visoko and 'Roco-Commerce' from Livno.

Two bidders from different geographical areas submitted a bid together, and this can only indicate pre-arranged cooperation between them," the Competition Council of BiH decision reads.

Incidentally, these companies attempted to deny the joint prohibited agreement, but without success. Thus, the company "Komgrad-Ze" stated that there was a misunderstanding between the director and the employee responsible for conducting the e-auction.

As they claimed, the director ordered that during the e-auction, the price could be lowered by a maximum of 10 percent from the first-placed bid, but the employee responsible for being the operator interpreted it as lowering the price by 10 percent each time.

Furthermore, they stated that it was a mistake, in no case intentional, for which disciplinary proceedings were conducted against the employee-operator, and a measure was imposed, a written warning prior to termination of the employment contract.

However, when the Competition Council requested documentation regarding that proceeding, they did not receive it.

The company "Roco-Commerce" also denied its involvement. They defended themselves with the fact that the law allowed them to lower the price, as well as to withdraw the bid.

From the company "Ado-Trans", they claimed they did not know who participated in the auction, and therefore did not know who lowered the price.