SUPREME ADMINISTRATIVE COURT OF LITHUANIA: CONSTRUCTION COMPANIES RESTRICTED COMPETITION IN PUBLIC PROCUREMENT THROUGH JOINT BIDDING

The Supreme Administrative Court of Lithuania (Court) rejected the appeals by the construction company Panevėžio statybos trestas (PST) and company Active Construction Management, previously known as Irdaiva, and upheld the ruling of the court of first instance confirming the fines imposed on the firms for anti-competitive joint bidding.

On 3 June the Court‘s panel of judges confirmed the Lithuanian competition authority‘s findings that the two companies infringed the Law on Competition when they presented joined bids in 24 public tenders even though, taking into account their experience, qualifications and capacities, they both were able to bid separately and exert competitive pressure on each other and other market participants.

When addressing the argument by one of the applicant’s that Irdaiva was not capable of performing all works in successful tenders alone and also did not have sufficient human and financial resources to participate in all procurements, the Court noted there was no reasonable explanation why in cases concerned the company could not use its previous practice and, for instance, use subcontractors or enter into joint collaboration agreements with undertakings which were not able to perform works individually.

The ruling of 14 May 2018 by Vilnius Regional Administrative Court upholding EUR 8,513,500 fine on PST and EUR 3,685,900 fine on Irdaiva was left unchanged. According to the Court, the fines are proportionate to the nature, duration and gravity of the infringement.

Both courts acknowledged that joint-bidding allows companies that cannot submit their tenders individually to pool resources and increase competition. Yet, this does not mean that undertakings, which are capable of participating in the bidding process independently, can use joint-bidding as a means to restrict competition.

The ruling of the Court is final and binding.