A PROHIBITED AGREEMENT OF TENDERERS IN THE ENVIRONMENTAL AREA DISCLOSED

18 12 2008

The Competition Council passed the Resolution concerning the compliance of the actions of the undertakings providing the services related to the implementation of the projects supported by the structural funds of the European Union with the requirements of Article 5 of the Law on Competition. Having considered the findings of the completed investigation the Competition Council acknowledged that the Support Fund Agilė had concluded a prohibited agreement with the PE Baltijos aplinkos forumas and Vandens projektai, UAB concerning the participation in a tender announced by the Trakai region municipality for the purchase of the copyright services with a view to implementing the project "Public inclusion into the pollution reduction activity in the Trakai region". The Competition Council imposed the appropriate fines for the infringement of Article 5 of the Law on Competition – the Support fond Agilė – LTL 3,300, PE  Baltijos aplinkos forumas – LTL 8,500 and Vandens projektai, UAB – LTL 20,300. The amounts of the fines imposed account for 2 - 4 percent of the total annual turnover of the undertakings for the previous economic year.

The Competition Council conducted the investigation in response to the application of the Environmental Project Management Agency of the Ministry of Environment of the Republic of Lithuania (EPMA). In its application the EPMA claimed that the examination of the documentation of the recipients of support from the EU structural funds gave rise to a suspicion that the same companies continue to participate in the tenders, while the tenders have been repeatedly awarded to the same single company.

The evidence obtained in the course of the investigation enabled the Competition Council to conclude that prior to the participation in the tender for the purchase of the copyright services in order to implement the Project funded by the EU structural funds the undertakings concerned, such as the Support Fund Agilė, PE Baltijos aplinkos forumas and Vandens projektai, UAB had been coordinating their tender proposals. The investigation produced the evidence that the undertakings concerned, while being competitors, had committed a severe infringement of competition law – they formed a cartel agreement by agreeing to submit to the tender the coordinated tenders, including coordinated tender prices. As prior to the tender the undertakings had been coordinating their tender prices, actually Vandens projektai, UAB and PE Baltijos aplinkos forumas did not compete with the Support fund Agilė, as a result enabling the Fund to win the tender by offering the lowest price. The undertakings concerned each of which operating on the same service provision level, had concluded a horizontal agreement restricting competition.

Vandens projektai, UAB and PE Baltijos aplinkos forumas are known as regular participants in public procurement tenders and are well familiar with the principal procedures established by the Law on Public Procurement. The Competition Council hereby notes that the Law on Public Procurement, inter alia, establishes a prohibition to restrict competition. Fair competition ensures the preconditions for the procuring organisation to select a most appropriate tender from several offers. Fair competition is absolutely vital to attain the objective provided for in Article 3 of the Law on Public Procurement - to ensure the efficient use of public (in this case also the European Union) funds.

Competition Council Spokesperson