Fair Trade Commission "Jigu Corporation and 4 Others Penalized for Bid Rigging on Public Concrete Sewer Pipe Contracts"
Imposition of a Total Fine of 59 Million KRW Along with an Administrative Order
[Sejong=Asia Economy Reporter Joo Sang-don] The Fair Trade Commission announced on the 11th that it has decided to impose corrective orders and a total fine of 59 million KRW on five businesses, including Jigu Corporation, for colluding in advance on the winning bidders in three bids for prefabricated large concrete sewer pipes (totaling 2 billion KRW).
According to the Fair Trade Commission, five businesses?Jigu Corporation, Hyundai Gongyeong, Daeshin PCT, Taeyoung PCM, and KYP C?agreed in advance on the winning bidders and dummy bidders in three bids conducted by Seocho-gu, Seoul, the Korea Environment Corporation, and Hwaseong City, Gyeonggi Province, for the purchase of prefabricated large concrete sewer pipes, and executed this agreement.
These companies agreed to designate the bidders who had conducted prior sales activities with the demand institutions or were close to the construction sites as the winning bidders, while the remaining companies would participate as dummy bidders. Based on this, in the three bids, the winning bidders submitted bids with a rate below 96%, while the dummy bidders either submitted bids at 96% or higher or did not submit bids at all, thereby executing the agreed terms.
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A Fair Trade Commission official stated, "In the case of the bidding method involved in this incident, the 'two-stage competitive bidding for multiple suppliers,' bidders had to submit bids close to 90% of the predetermined contract price to win the bid, so they could not expect high profits. Therefore, the businesses engaged in this collusion to prevent profitability deterioration caused by low-price bidding," adding, "It is expected that this will have a suppressive effect on collusion in many public procurement bids conducted under the same system."
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