Competition fines with 61.2 million to twelve construction companies for sharing contracts for maintenance and operation of roads

The CNMC has sanctioned with a total of 61.28 million euros to 12 construction companies for forming a cartel to alter tenders for road maintenance and operation services called by the Ministry of Public Works (now the Ministry of Transport, Mobility and Urban Agenda) from 2014 to 2018. Among those sanctioned are the six big six in the sector in Spain: ACS, FCC, Sacyr, Ferrovial and OHL.

Competition investigates whether Ferrovial and other construction companies have manipulated road tenders “since at least 2014”.

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The CNMC considers that the companies have committed a very serious infringement prohibited by Article 1 of Law 15/2007 on the Defence of Competition and Article 101 of the Treaty on the Functioning of the European Union. (S/0013/19).

The sanctioned companies are Acciona Mantenimiento de Infraestructuras, S.A. and jointly and severally its parent company Acciona, S.A., Aceinsa Movilidad, S.A.) Alvac, S.A., API Movilidad, S.A. and jointly and severally its parent company ACS, Audeca, S.L.U. (Audeca) and jointly and severally with its parent company Elecnor, S.A., Sociedad Anónima de Obras y Servicios Copasa (COPASA), Elsamex, S.A. (Elsamex), Elsan, S.A. (Elsan), and jointly and severally its parent company Obrascón Huarte Laín, S.A., Ferroser Infraestructras, S.A. and jointly and severally its parent company, Ferrovial, Innovia Coptalia, S.A. (Innovia) and jointly and severally with its parent company, Copcisa Corp. S.L., Mantenimiento de Infraestructuras, S.A. (Matinsa) and jointly and severally with its parent company Fomento de Construcciones y Contratas, S.A., Sacyr Conservación, S.A.U. (Sacyr Conservación) and jointly and severally with its parent company Sacyr, S.A.

The largest penalties corresponded to API, a subsidiary of ACS (11.78 million); Matinsa, of FCC (8.54 million); Alvac (5.86 million); Ferroser, of Ferrovial (5.17 million); Copasa (5.6 million); Sacyr Conservación (5.17 million); and Elsamex (4 million).

The operation of the cartel was developed through meetings “to have coffee” where the offenders periodically established the criteria for the coordination of the offers.The issue that was included in the calls for tenders of Fomento for road maintenance services of the State Road Network. “The subject of the calls for tender was “to have a coffee”, “to adopt common positions” or “to have a coffee and tell us our sorrows and joys”,” reads the resolution. This is not signed by the president of the CNMC, Cani Fernandez, who has had to inhibit several decisions of the agency for its past as an elite lawyer for companies in competition matters.

In the documentation intercepted by the CNMC, the cartel participants used “a particular and common jargon that uses atypical expressions to describe the strategy of the companies in relation to the bids to be submitted to the tenders. The expressions “tiro”, “tanteo”, “bono”, “tacada”, “renovador”, “apoyos” are common in the direct evidence,” the resolution states.

The cartel grouped the tenders in groups for which common criteria for the presentation of offers were agreed. A “bag” of points was assigned to each group of tenders that were consumed according to the level of discounts on the contracting budget. The higher the discount, the more points were spent, applying a specific formula for each group of contracts.

This limited the number of contracts for which companies submitted high discounts in each bidding group, as the number of points in the pool was never enough to try to win all the contracts in each group.

This system, according to the CNMC, encouraged each company to concentrate its chances of being awarded a limited number of tenders, submitting bids with little or no chance of being awarded in the remaining tenders. This is what is known as cover bids.

The companies also agreed on the discount threshold for these cover bids and undertook to submit bids for all tenders in each group. In this way they were able to alter the abnormality threshold (calculated on the basis of the bids submitted in each tender) and could ensure that truly competitive bids from companies outside the cartel were excluded from the procurement process.

The CNMC points out that “the sophisticated system designed by the companies was adapted to the successive changes in the contracting specifications introduced by the administration. The mecThe ‘complex mechanics employed by the cartel were particularly complex, making it easy to monitor compliance while making it extremely difficult to detect’.

70% of the awards

Competition has been able to accredit that the cartel operated between February 2014 and December 2018, although it has detected conversations since 2009. The participating companies were awarded 71 tenders out of a total of 101 that Fomento took out related to the provision of services for the conservation and operation of the State Road Network. The total amount of the awards to companies in the cartel exceeded 530 million euros, 63% of the total amount awarded by the ministry for this item, “which gives an idea of the impact and scope of this cartel”, highlights the CNMC.

The existence of this investigation was revealed by in April 2019. The agency received in October 2017 anonymous information warning of the possible existence of a cartel that in this market. After inspecting several company headquarters in 2018, in July 2019 sanctioning proceedings were opened against 13 companies and in December 2020 Ferrovial Services was included in the file. In the end, Ferrovial Services was not sanctioned as the perpetrator, but as jointly and severally liable for the conduct of its subsidiary.

The CNMC has decided to send the notification of this resolution to the State Procurement Board in order to initiate the procedure to determine the duration and scope of the sanctioned companies, to the extent that they may continue to be bidders in public procurement procedures. This procedure, which is ultimately decided by the Ministry of Finance, has never been implemented. The veto will depend on a report by an advisory board on which the construction companies themselves are represented.

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