The settlements are subsequent to an investigation by the commission into 69 companies offering furniture removal services for colluding on tenders issued by various government departments.
Cape Express admitted to having rigged numerous relocation tenders and agreed to pay an administrative penalty in the amount of 645,710 rand while Propack Removals admitted to the conduct and agreed to pay an administrative penalty in the amount of 454,127 rand.
Both amounts represent 10 per cent of the individual companies’ annual turnover for the 2012 financial year.
“Cover pricing is an anticompetitive practice intended to give a false impression of a fair competitive bidding process when in actual fact it is not,” said Commissioner Tembinkosi Bonakele.
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“The commission is pleased by the high number of companies which came forward to confess their involvement in the collusive conduct.”
Its investigations revealed that between 2007 and 2012, over 3500 relocations tenders were subjected to collusion by the 69 companies providing furniture removal services.
The commission further stated that the departments which issued the tenders include but are not limited to the South African National Defence Force, South African Police Services (SAPS), as well as large corporates such as Eskom and Pretoria Portland Cement (PPC).
“We are confident that this is the first of many settlement agreements that will be entered into with more companies in the furniture removal market by the end of October,” Bonakele said.
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According to the commission, a firm that is contacted first regarding a request for quotation for furniture removal services would offer to source two or more quotations on behalf of the customer. The firm would then request that two or more of its competitors submit quotes as cover prices.
The other competitors would submit a price that is not intended to win them the tender – such a price would have been agreed upon between the colluding bidders and decided on who will win the tender.