Although the third party in the controversial P113 million tender has tried drenching itself in super-concentrated cologne, all the Competition Authority still smells is a rat. The Authority has decided to grant Bonanza Equipment immunity from prosecution under its leniency policy because the company has undertaken to assist the former in the investigation as well as to provide valuable evidence. Bonanza came in the picture after an anonymous source (“in a different market”) implicated the company in the scheme to rig the bid.
The source alleged that Bonanza and Creative Business Solutions had shared pricing information about the multi-million pula tender but the latter betrayed Bonanza by striking a deal with Rabbit Group. The Authority’s papers say Creative Business Solutions had “undercut” Bonanza. When the Authority investigated the allegation, it found that there was a consistent price differentiation between Creative Business Solutions and Bonanza, all in favour of the former. Bonanza refuted allegations that it was involved in bid rigging or any other prohibited conduct in connection with the tender. The company has disclosed to the Authority that, at the request of Creative Business Solutions, it issued a price quotation for possible supply of sugar beans. It provided a copy of email correspondence to back up such assertion.
“However, the email conveying the price schedule paints a picture that is completely different from the one sought to be portrayed by Bonanza Equipment. The heading reads thus: “Prices for beans tender”. It goes on to say: “Please use the prices per this email”, and then the prices are given as per stated quantities of the sugar beans per depot, exactly as tabulated in the tender documents,” the Authority says in an affidavit deposed to by one of its employees, Goitseone Modungwa. Here the plot thickens.
When Modungwa analysed the tender documents, she found that “Bonanza had tendered for the project using prices which were conveniently lower than those of Creative Business Solutions.” Bonanza’s total tender price is P118 289 304 while it proposed P123 223 800 for Creative Business Solutions. “In other words, Bonanza had intended to undercut Creative Business Solutions but that strategy backfired,” Modungwa’s affidavit says. She then firmly asserts that evidently there was a horizontal agreement to rig the bids by and between Bonanza and Creative Business Solutions, which was intended to benefit Bonanza solely.
“However, that strategy did not succeed as Creative Business Solutions had then proceeded to conclude a separate horizontal agreement with [Rabbit Group] in order for both to undercut Bonanza as a competitor and to rig the tender in question.” The case that the Authority will make to the Competition Commission is that Creative Business Solutions got price information from Bonanza which was then used by both itself and Rabbit Group “systematically to share equally, both geographically and in monetary value, the entire tender project between themselves.”