KUALA LUMPUR, March 5 — Eight companies could face penalties amounting to RM1.936 million after they were discovered to have used bid-rigging in public procurement by the Malaysia Competition Commission (MyCC).

MyCC Chief Executive Officer Iskandar Ismail said the companies had formed two cartels to conduct bid suppression and cover bidding on tenders involving the procurement of IT services worth RM1.925 million for the National Academy of Arts, Culture and Heritage (Aswara).

The companies are Tuah Packet Sdn Bhd, Caliber Interconnects Sdn Bhd, Aliran Digital Sdn Bhd, Viamed Sdn Bhd, Novatis Resources Sdn Bhd, Silver Tech Synergy Sdn Bhd, Basenet Technology Sdn Bhd and Venture Nucleus (M) Sdn Bhd.  

The companies are being fined under the Competition Act 2010 which stipulates that they could face a penalty of a maximum 10 per cent of their revenue.

Iskandar explained that MyCC had proposed penalties amounting to RM1.936 million but the final amount will be decided after the companies have submitted their defence.

He said the companies were found to have rigged bids in three quotations and one tender process for Aswara some two years ago, with MyCC investigations concluding in October last year.

He said Aswara is not under investigation, applauding the latter’s cooperation in the matter.

In pointing out that the companies were the first to be penalised under the Competition Act 2010 for the procurement of government projects, he said: "The bust will sent a clear message that MyCC will take stern action against those who engage in anti-competitive tactics such as creating a cartel to control prices.

"Such actions if left unchecked will not only bleed the government but would hamper ethical companies with better goods and services from bidding in government tenders.”

Cover bidding occurs when bidders agree to submit bids that are meant to be rejected, so that another conspirator can win the contract, and bid suppression is when bidders agree to either abstain from bidding or withdraw a bid.

Both type of bid-rigging could lead to the government paying above the market price for goods or services as the bid process makes it seemed as though the government is getting the best quotations, said Iskandar.

Iskandar said MyCC is pursuing five other cases of bid-rigging related to government procurement but declined to divulge further details.