The company which powers up Singapore’s Formula One race has been accused of colluding with others to ensure it offered the lowest bid to win the tender.
The Competition Commission of Singapore (CCS) yesterday issued a Proposed Infringement Decision against Cyclect Group, which eventually won the tender, HPH Engineering and Peak Top Engineering.
These firms now have six weeks to make their representations to the CCS, before a final decision is made.
The tender to provide electrical services for Singapore’s showcase Grand Prix from 2015 until this year was called some time in December 2014.
Bids were submitted by Cyclect Electrical and Chemicrete Enterprises, which are part of the Cyclect Group, as well as HPH and Peak Top. The tender was eventually awarded the following April to Cyclect Electrical.
But the competition watchdog’s investigations found that Chemicrete, HPH and Peak Top all sent in substantially higher prices than Cyclect Electrical’s bid, with the intention of letting the latter win the tender. Cyclect Group allegedly told HPH and Peak Top how much they should bid.
The CCS said it understands that there exists past working or personal relationships between Cyclect Group, and HPH and Peak Top.
In response to queries, Cyclect Group’s chief executive Melvin Tan said that the alleged infringements happened some years ago, and that the company has since enforced stricter policies and systems to ensure compliance. He declined to comment further.
Asked whether Cyclect Electrical would remain the contractor for this year’s race, a Singapore GP spokesman declined to comment, citing the provisional nature of the Proposed Infringement Decision.
The other firms involved did not respond to requests for comment.
According to Cyclect Group’s website, it has been the main electrical contractor for the Singapore Grand Prix since the first Formula One race in 2008.
Electrical services called for in the tender include the provision and management of labour, materials and equipment to install and remove electrical works, as well as maintenance and service support for lighting and electrical items for the pit building during the Grand Prix event.
Yesterday’s Proposed Infringement Decision also alleged that Chemicrete Enterprises had colluded with HPH Engineering in a separate instance of bid rigging.
In March 2015, international school Gems World Academy called for a quote for the procurement of barcode tagging services for its campus property.
It received three quotes, including from Chemicrete and HPH. The tender was awarded to Chemicrete, which had submitted the lowest quote.
According to CCS’ investigations, Chemicrete sought HPH’s assistance to win the tender by having it submit a higher quote than its own.
The CCS did not disclose the value of the two contracts under the spotlight.
Under the Competition Act, business entities should not enter into any agreement or engage in any concerted practice with the object or effect of preventing, restricting or distorting competition.
The CCS has the discretion to impose on parties that infringe the Act a financial penalty of up to 10 percent of the business’ turnover in Singapore for each year of the infringement, for a maximum of three years.