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PROHIBITED AGREEMENT IN TENDERS FOR CONSULTING SERVICES TO OBTAIN GRANTS FROM THE EU STRUCTURAL FUNDS

22 06 2006

Having in its meeting examined the findings of the completed investigation the Competition Council concluded that certain undertakings, namely, UAB Eurointegracijos projektai, PI  Perspektyvių inovacijų agentūra and UAB Apskaitos sprendimai (current name UAB Mag Solutions), have, while tendering in the consultancy services tender for obtaining grants from the EU structural funds, concluded a prohibited agreement whereby committing a violation of the requirements of Article 5 of the Law on Competition. The following fines were imposed upon the violating companies: UAB Eurointegracijos projektai – in the amount of 3% of the annual aggregate income (LTL 41,646), PI Perspektyvių inovacijų agentūra“– 3% of the annual aggregate income (LTL 2,958), and UAB Mag Solutions – LTL 1000.

The Competition Council launched the investigation in question upon the request received form the Lithuanian Business Support Agency. Having considered all facts and evidence collected in the course of the investigation the Competition Council concluded that the undertakings concerned had concluded the prohibited agreements by submitting to the procuring organisations the coordinated tenders and agreed tender prices. The above undertakings were participating in the tenders for drafting project proposals applying for financial assistance from the EU Structural Funds under the measure „Ensuring of energy supply stability, accessibility and increased efficiency“ of the Single Programming Document of Lithuania for 2004-2006. The principal organisers and purchasers of the consulting services under the tender were secondary schools, business and special schools, hospitals, care homes, boarding-houses, county and municipal administrations seeking to obtain financial assistance from the EU Structural funds for renovation, modernisation, development of their respective premises and other similar purposes.

The investigation showed that UAB Eurointegracijos projektai, the awarded undertaking in the tender for the purchase of consulting services regarding the energy audit of buildings, drafting of investment projects and the applications succeeded basically due to the fact that the other tenders PI Perspektyvių inovacijų agentūra and UAB Apskaitos sprendimai actually did not compete with the awarded winner. The prohibited agreement concluded by the tenderers facilitated the winning of the tender by UAB Eurointegracijos projektai thus causing significant restrictions of competition in the relevant market for consulting for the purpose of application for support from the EU Structural funds. The investigation targeted the tenders announced and launched in 2004 and the first quarter of 2005.

Based on the information provided by the Lithuanian Business Support Agency the investigation established that UAB Eurointegracijos projektai, PI Perspektyvių inovacijų agentūra and UAB Apskaitos sprendimai, on a joint basis, participated in 64 tenders implemented in different towns of Lithuania, of which 60 tenders were awarded to UAB Eurointegracijos projektai, four tenders were won by PI Perspektyvių inovacijų agentūra, and none was awarded to UAB Apskaitos sprendimai. Upon the scrutiny, by specialists of the Competition Council, of the tender documents it was found out that all the three tenderers were submitting the identically completed application forms and also were on a regular basis continuously communicating through persons in charge of the tenders. The undertakings, supposedly competing in the tender, but instead having concluded a prohibited agreement to submit to the tender their coordinated tenders, would create conditions favourable for UAB Eurointegracijos projektai to win a number of tenders thus acquiring the leading position in the market. Other parties to the prohibited agreement, primarily the PI  Perspektyvių inovacijų agentūra attempted to demonstrate efforts to compete by introducing into the tender several rather than a single undertaking and offering different tender prices. For that purpose the undertakings would coordinate the tender prices in a way to ensure that the lowest price offered was that by the perspective winner while prices offered by the other two competitors were much higher. The agreement concluded in this manner facilitated the creation of injurious trends in the tendering system.

The Competition Council concluded that the three companies while participating in the tenders subject to the investigation were concerting their joint actions thereby committing an infringement of Article 5(1) of the Law on Competition providing for the prohibition of all agreements restricting competition of the object whereof is to restrict competition including the agreements between competitors to participate in the tender and submit concerted tenders. The evidence collected in the course of the investigation allowed a conclusion that the active role in the conclusion of the prohibited agreements was played by two companies UAB Eurointegracijos projektai and PI Perspektyvių inovacijų agentūra leaving UAB Apskaitos sprendimai in a more passive position.

Competition Council Spokesperson