Wesley College at the University of Sydney. Photo credit: Toby Hudson via Wikipedia
The Australian Competition and Consumer Commission (ACCC) has instituted civil proceedings in the Federal Court against two Sydney roof tiling businesses for alleged cartel conduct.
Action is being taken against First Class Slate Roofing (First Class) and RAD Roofing Specialists (trading as Mr Shingles) and their sole directors, Scott Barton of First Class and Damian Hand of Mr Shingles,
First Class and Mr Shingles are providers of slate roofing works in Sydney and its surrounds.
“The ACCC alleges that First Class, Mr Shingles and their respective sole directors colluded to rig bids for tenders in exchange for cash payments at two construction projects,” commission Chair Rod Sims said.
The allegations include that, in August 2019, First Class and Mr Shingles engaged in bid rigging for the supply of slate roofing services at the Wesley College at the University of Sydney.
It is alleged that the purpose of the bid rigging was to increase the likelihood that First Class would win a tender for supplying Wesley College in exchange for a cash payment from First Class to Mr Shingles. First Class ultimately won the Wesley College tender.
It is also alleged that in September 2019, First Class and Mr Shingles engaged in bid rigging in relation to a tender for a residential building project in Sydney’s Bellevue Hill.
The ACCC is contending that the purpose of rigging the Bellevue Hill Tender was to ensure that Mr Shingles would be more likely to be the successful tenderer, which Mr Shingles eventually won.
According to a statement from the commission, it also alleges that the cash payment Mr Shingles was to pay First Class for bid rigging the Bellevue Hill tender was offset by the money it was due to receive for rigging the Wesley College tender.
“This case demonstrates how cartel conduct, such as bid rigging, corrupts the competitive process and has the potential to artificially inflate prices for customers,” Sims said.
“The ACCC takes allegations of cartel conduct very seriously and will not hesitate to take strong enforcement action against any company or individual who engages in this type of conduct.”
In bringing the case to court, the ACCC is seeking penalties, declaration, injunctions and disqualification orders against Barton and Hand.
Bid rigging occurs when two or more competitors agree they will not compete genuinely with each other for tenders, allowing one of the cartel members to ‘win’ the tender. Participants in a bid-rigging cartel may take turns to be the ‘winner’ by agreeing about the way they submit tenders, including some competitors agreeing not to tender at all.