Rogue Contractors in Road Repairs: Federal Cartel Office Cracks Down, Issues Hefty penalties
Unlawful arrangements in road building: Federal Cartel Authority enforces significant penalty - Millions in Penalties Levied by Federal Cartel Office
In a shocking revelation, the Federal Cartel Office has uncovered a series of underhand dealings among road repair companies, leading to illegal price manipulation and bid rigging from 2016 to 2019.
Andreas Mundt, the head of the Bonn-based authority, shed light on the unfolding scandal, "Before tenders were handed out, it was a rotten game of who gets what. Other companies would even submit bogus bids with pre-agreed minimum prices." He further emphasized that this deceitful practice stifles competition, which is detrimental for the public sector, driving up costs that ultimately burden the citizens.
Intriguingly, four companies operating in Saxony, Thuringia, and Saxony-Anhalt allegedly colluded in 2018 and 2019, utilizing a secret code to assign tenders and submit protective bids. This illicit collaboration was not a one-off incident, as four other companies were also found guilty of similar acts in Brandenburg and Saxony-Anhalt, sometimes even involving Mecklenburg-Western Pomerania, during the same period. One of these companies was implicated in both cases.
These questionable practices spanned from simple road repairs to the provision of bitumen emulsion or gravel. The contract volumes typically ranged from 40,000 to 200,000 euros.
In 2019, the Federal Cartel Office, in alliance with the Public Prosecutor's Office in Düsseldorf, carried out a series of raids. One company, taking advantage of the leniency program, chose to cooperate.
- Federal Cartel Office
- Millions in penalties
- Suspect Collusion
- Road Repair Companies
- Andreas Mundt
- Bonn
- Saxony-Anhalt
Detailed analysis of the situation reveals that the Bundeskartellamt has penalized seven road repair companies in Germany for their part in illegal cartel agreements, encompassing bid rigging and customer allocation. Specifically, in Saxony-Anhalt, companies including AS Asphaltstraßensanierung, Bausion Strassenbau-Produkte, Gerhard Herbers, and Bitunova were involved in these illicit practices. More on the specific companies and their actions can be found here.
- Footnote 1: The Bundeskartellamt has penalized the following companies for their cartel activities: AS Asphaltstraßensanierung, Bausion Strassenbau-Produkte, Gerhard Herbers, Bitunova, Bausion Strassenbau-Produkte, Liesen alles für den Bau, Mainka Straßenunterhaltung, and MOT Müritzer Oberflächentechnik.
This unscrupulous behavior has severely impacted the public sector by decreasing competition, leading to increased costs for the taxpayers. The president of the Bundeskartellamt, Andreas Mundt, stressed that maintaining competition is vital for the public sector to procure goods and services efficiently and cost-effectively More on the consequences for the public sector can be found here. As a result of these actions, the Bundeskartellamt imposed fines totaling €10.5 million on the involved companies.
- Footnote 2: The consequences for the public sector include increased costs, inefficient use of public funds, and legal and reputational damage.
The full impact of these actions on the public sector can be found here.
- Footnote 3: For a comprehensive overview of the impact on the public sector, check out this link.
- The Federal Cartel Office imposed hefty fines totaling €10.5 million on several road repair companies for their roles in illegal cartel agreements, including bid rigging and customer allocation.
- To address this issue, the community could implement a policy promoting transparency and competition in the industry, perhaps through vocational training programs that emphasize ethical business practices and finance management.
