Call for investigation into potential bid-rigging of public works contracts

Galway Daily news Freedom of Information

Galway West TD Mairéad Farrell has called on Minister Michael McGrath to request an investigation into potential bid-rigging of public works contracts.

The call comes after the Spanish Competition Authority issued fines of over €200m to six major construction companies for colluding on bids for public contracts.

Five of the companies are heavily involved in Irish public-private partnership projects, particularly motorways.

Bid-rigging is a form of collusive behaviour by contractors to increase the price of a contract or to allow a pre-selected contractor to win a competition for a building project.

It is a practice described by the Competition and Consumer Protection Commission (CCPC) as ‘a serious form of anti-competitive behaviour’.

Reuters reported that the six companies met on a weekly basis from 1992 to 2017 to discuss the projects they were planning to bid for, and to coordinate strategy.

Deputy Farrell said that given the significant involvement of these companies in Irish infrastructure projects, we have to question whether this practice was taking place here.

“This practice pushes up the prices for public works contracts, and given the large amount of spending which has been outlined in the National Development Plan (NDP), it poses significant fiscal risks.”

She said that our Competition Authority has been pointing out since the 1990s that bid-rigging is a serious concern here, and it sought more powers in the 90s to deal with this, which were granted.

“Its powers were also further enhanced in the last few years. But the difficulty for Ireland dealing with this is that the state’s characteristics make us particularly vulnerable to this practice,” said Deputy Farrell.

“Characteristics like a limited number of alternative suppliers, high barriers to entry, opportunities for repeated interactions among competitors, active trade associations which can be used, either wittingly or unwittingly, to facilitate coordination amongst competing firms, and close connections between political parties and certain industries.

“I am now calling on Minister McGrath to request the Competition and Consumer Protection Commission (CCPC) to investigate this matter.”