ACCC takes action over alleged attempted cartel for National Gallery of Australia tender

The ACCC has instituted civil proceedings in the Federal Court against Delta Building Automation Pty Ltd (Delta) and its sole director, Timothy Davis, for involvement in an alleged attempt to rig a bid in connection with a tender conducted by the National Gallery of Australia in Canberra.

The alleged attempted cartel conduct occurred in late 2019, and relates to a tender for the replacement and ongoing maintenance of a building management system at the National Gallery.

The National Gallery was not involved in or aware of the alleged conduct at the time, and did not suffer any loss.

Delta is a company which designs, installs and maintains building management systems which manage equipment in large buildings.

The ACCC alleges that Mr Davis, acting on behalf of Delta, attempted to make, or attempted to induce the making of, an arrangement or understanding with a competitor to engage in bid rigging.

Specifically, it is alleged that the attempt was made during a meeting at a Canberra café in December 2019 between Mr Davis and a representative of a competitor. The ACCC alleges that at the meeting, Mr Davis attempted to fix the price of bids to be submitted by Delta and its competitor in response to the National Gallery’s building management system tender or to ensure that Delta was more likely to be successful in winning the tender.

“The alleged cartel behaviour, involving an attempt to bid rig with a competitor in respect of bids for the tender of a government institution like the National Gallery of Australia, is of particular concern as it had the potential to impact the cost to taxpayers,” ACCC Chair Rod Sims said.

Ultimately, the proposed arrangement or understanding was not made, which the ACCC alleges was because the competitor rejected Delta and Mr Davis’ approach.

“It is illegal for any corporation to make or attempt to make cartel arrangements with its competitors. Cartel arrangements usually drive up prices to the detriment of consumers or other businesses and organisations, and are strictly prohibited,” Mr Sims said.

The ACCC is seeking declarations, pecuniary penalties, injunctions and costs, as well as an order disqualifying Mr Davis from managing a company, and orders for compliance training.

The case will be listed before the Federal Court at a date to be set.

Background

A building management system is a computer-based system installed in buildings to manage and monitor a building’s equipment such as air-conditioning, ventilation, lighting, and power systems.

Delta Building Automation Pty Ltd is part of a group of companies (the Delta Group) which operate as the Australian exclusive distributor for the Delta Controls brand of building management systems. The Delta Group designs, installs and maintains building management systems and operates in most states and the ACT.

Mr Davis is a director of each company in the Delta Group.

Note for editors

Cartel behaviour, which involves businesses agreeing to act together instead of competing fairly breaches the Competition and Consumer Act. Cartel conduct can involve price fixing, bid rigging, market sharing, and controlling the amount of goods or services available.

Anyone concerned about an issue in the construction industry can anonymously report a construction sector issue to the ACCC’s Commercial Construction Unit. Anyone with information about any cartel conduct in another industry can anonymously report cartel conduct via the ACCC website.

Anyone who thinks they may be involved in cartel conduct can also apply for immunity from prosecution in exchange for helping with the ACCC’s investigations by contacting the ACCC cartel immunity hotline on (02) 9230 3894.

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