National

FTC moves on bid-rigging

113 firms told to halt illegal practices on public works

The Fair Trade Commission on Wednesday ordered 113 construction companies to stop rigging bids on public works for the Niigata Municipal Government.

The FTC said that in terms of value, roughly a third of the bids for the city’s civil engineering works and more than 60 percent of building construction works were rigged between April 1999 and last September.

FTC officials told a news conference in Tokyo that the commission suspects that the companies involved also rigged bids before April 1999, but could not find sufficient evidence.

Among the major contractors ordered to stop rigging bids are Kajima Corp., Shimizu Corp., Taisei Corp., Maeda Construction Co. and Fujita Corp.

The FTC said the companies rigged bids for at least 317 sewage construction projects, worth a total 40.6 billion yen, and 51 building projects worth 19.8 billion yen.

The FTC raided the offices of some of the companies on its list in September.

The 113 companies have until Aug. 9 to decide whether they will accept the FTC’s allegations. If they refuse, hearing procedures will be launched to allow the companies to rebut the FTC’s allegations.

The FTC said several general contractors and local companies have coordinated the bidding process to decide winners in advance.

It said five officials of the Niigata Municipal Government leaked the confidential price ceilings for bids to at least 52 of the 113 companies. In public works bidding, a bidder is immediately disqualified if its bid exceeds the upper limit. The cut-off price is required by law to be kept secret by officials.

FTC officials said the municipal office regularly leaked the cut-off price to companies when asked.

Using their knowledge of the price ceilings and other details of projects, bidders won contracts with bids extremely close to the cut-off prices, they said.

The average winning bids in such cases were between 97 percent and 99 percent of the cut-off prices, the FTC said.

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