October 11, 2017
On October 10, 2017, the Competition Bureau (Bureau) announced that another individual has pleaded guilty to rigging bids in relation to a condominium development project investigation (see: here). In this case, an estimator for a firm called Les Industries Garanties Limitee in Quebec pleaded guilty to criminal bid-rigging in relation to three condominium developments in Montreal involving competing firms for a condominium ventilation contract.
In exchange for pleading guilty, the accused agreed to perform 50 hours of community service and “collaborate with the Bureau as the matter progresses”.
This development in this condominium procurement related case is not significant in terms of the quantum of penalty or new law. However, it is noteworthy in highlighting several trends in relation to the Bureau’s criminal competition law enforcement efforts:
First, bid-rigging and public procurement continues to be a top Bureau priority. For example, last week’s International Competition Network (ICN) Cartel Workshop in Ottawa, which was hosted by the Bureau, was focused on combatting cartels in public procurement (including bid-rigging detection, investigation, prevention and deterrence). The Bureau has amplified its bid-rigging outreach efforts over the past several years based, among other things, on the Federal Government’s commitment to significantly increase infrastructure spending.
Several more specific Bureau bid-rigging and procurement related initiatives over the past several years have included the launch of a Federal Contracting Fraud Tip Line (see: Report wrongdoing in government contracts and real property agreements), increasing its outreach to public procurement bodies and expanding its partnerships with other law enforcement agencies. The Bureau has also been working on developing data screening mechanisms (algorithms) to better assist procurement agencies detect bid-rigging in public sector tenders.
Second, the Bureau has said over the past several years that it is interested in increasingly pursuing individuals for Competition Act violations. In this recent bid-rigging related development, the Bureau has indicated that the individual will be cooperating in the Bureau’s investigation (likely under the Bureau’s Leniency Program).
Third, and related to the above point, this development is a reminder that the Bureau has established both Immunity and Leniency Programs, under which individuals or companies that may have violated the criminal provisions of the Competition Act (e.g., the bid-rigging or conspiracy provisions under sections 47 or 45) may apply for full immunity from prosecution or, if unavailable, leniency in sentencing (for more information, see: here).
Finally, the Bureau has been reported to be also conducting a criminal investigation into the supply of services in the Greater Toronto condominium market. While I have not yet seen any Toronto related announcements by the Bureau, this case may be part of a larger Bureau probe into condominium procurement.
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