KPPU imposed IDR 4.1 billion on the Bid-Rigging in Kutai Kertanegara.

Case Council of Commissioner consists of Kurnia Syaranie (Chairperson), Prof. Tresna  Soemardi, and Munrokhim Misanam, PhD has announced its decision in 4th October 2016 over the Case No. 01/KPPU-L/2016 related to bid-rigging in Pesut road development at the Office of Public Work and Water Resources of Kutai Kertanegara Region in 2015.

The case started from KPPU investigation on the suspected infringement of article 22 of Indonesian competition law conducted by PT. Aset Prima Tama, PT. Budi Bakti Prima, PT. Bangun Cipta Kontraktor, PT. Karunia Wahananusa, and the bid-committee of Procurement Unit under the Office of Public Work and Water Resources of Kutai Kertanegara Region. In their assessment, the Council found relevant evidences in horizontal conspiracy in the form of (i) cooperation between the four companies in preparing their bid-offer documents (which can be identified by the similarity of narative/description/redaction and typing error, unit price, and total prices); (ii) the fact where PT. Budi Bakti Prima, PT. Bangun Cipta Kontraktor, and PT. Karunia Wahananusa became the accompanying companies to PT. Aset Prima Tama by shaping several mistakes for their complementary bid to be failed in the administrative selection process, so that they can provide PT. Aset Prima Tama won the procurement.

The Council also proved the existence of collusion between the reported parties with the bid-committee by its negligance to check all bid-offer documents so that its failed to identify the similarities on the bid-offers. It was mandatory to them (the bid-committee) to eliminate all bid-participants when they identified the indication of unfair competition practices in the procurement. It was also found that the bid-committee informed the Unit Owner Estimates document to the reported parties so that they were able to set the bid-winner in an a quo process.

Based on such finding and evidences, the Council decided all reported parties to convincingly violated the article 22 of Indonesian competition law (on bid-rigging), and imposed administrative penalties to the companies with total fine amounting IDR 4,198,678,194. The Council also recommended Chairman of KPPU to provide an advice to the Governor of East Kalimantan, cq. the Region of Kutai Kartanegara, cq. the Head of Office for Public Work and Water Resources of Kutai Kertanegara Region to consider competition policy in their public procument works. Specifically, the Council also ordered the Head of Procurement Unit 2 at the Office for Public Work and Water Resources of Kutai Kertanegara Region to provide a written warning to the bid-committee on their failure to performed their tasks and facilitated the bid-rigging. The Council also required Chairman of KPPU to advice the Head of Government Procurement Policy Board (LKPP) to revise regulation and policies on bid evaluation system and require all procurement unit to check and compare all bid-documents to early detect and prevent bid-rigging to occur.

***