Competition Bureau Announces Charges Against Companies Accused of Rigging Bids for Government of Canada Contracts

OTTAWA, February 17, 2009 — Criminal charges have been laid against 14 individuals and 7 companies accused of rigging bids to obtain Government of Canada contracts for information technology services, the Competition Bureau announced today.

The Bureau found evidence indicating that several IT services companies in the National Capital Region secretly coordinated their bids in an illegal scheme to defraud the government by winning and dividing contracts, while blocking out honest competitors.

The Bureau’s investigation found evidence of criminal activity in 10 competitive bidding processes from 2005, for contracts worth approximately $67 million. The contracts related to IT professional services provided to the Canada Border Services Agency, Public Works and Government Services Canada, and Transport Canada.

"Bid-rigging is a serious criminal offence that harms buyers of products and services, competing businesses, and ordinary Canadians who ultimately pay the bills,” said Melanie Aitken, Interim Commissioner of Competition. “The Bureau will not hesitate to take action against bid-riggers when it uncovers evidence that the law has been broken."

Bid-rigging is a criminal offence where bidders secretly agree not to compete or to submit bids that have been pre-arranged among themselves. Their goal is to thwart the competitive tendering process and inflate prices to purchasers.

The Bureau actively reaches out to businesses and governments to educate procurement officials about bid-rigging, and to ensure they arm themselves with the tools to prevent, recognize and report such illegal activity to the Bureau. Procurement officials who believe they may have been victimized by bid-rigging are encouraged to bring the matter to the attention of the Competition Bureau.

An extensive Bureau investigation included cooperation secured under its Immunity and Leniency Programs. Under the Immunity Program, the first party to disclose to the Bureau an offence not yet detected, or to provide evidence leading to the filing of charges, may receive immunity from the Director of Public Prosecutions. Parties that approach the Bureau early in its investigation of criminal activities may be able to benefit from leniency - reduced penalties in return for their cooperation. These programs are among the Bureau’s best weapons to combat these secret criminal anti-competitive agreements.

Details of the offence and charges, including the names of the parties involved, are provided in the Backgrounder.

The Competition Bureau is an independent agency that contributes to the prosperity of Canadians by protecting and promoting competitive markets and enabling informed consumer choice.

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