Cape Town - Furniture removal firm Stuttaford Van Lines was on Wednesday charged with 649 counts of collusive tendering related to hundreds of government tenders issued for furniture transportation.
The Competition Commission, which referred the firm to the Tribunal after it completed its investigation, said the charges were the highest ever recorded in anti-cartel enforcement by the Commission.
The tenders were issued by the Presidency, Parliament, the SA Secret Service, the SA Police Service, the National Prosecuting Authority, SARS, the Reserve Bank, the Department of Justice, the Public Protector as well as SOEs and private companies, the commission said in a statement on Wednesday.
The commission has referred the case to the Tribunal for adjudication and is asking it to fine the company 10% of its annual turnover on each of the 649 charges.
The investigation revealed that Stuttaford colluded with its competitors from at least 2007 and entered into discreet collusive agreements relating to the furniture removal tenders, mostly involving government departments.
This involved cover quotes being submitted as part of the tender processes. Cover quotes are prices provided by a company that wishes to win a tender, to another company that does not wish to do so, the commission explained.
All the companies found to have colluded with Stuttaford settled with the commission, it explained. These are JH Retief Transport, Cape Express Removals, Patrick Removals and De Lange Transport.
In the furniture removal industry, a general requirement is that the removal of furniture of government employees requires at least two quotes in order to be financed by government.
Furniture removal companies had an arrangement that the company approached first would source the second quotation on behalf of the client from its competitor, the commission revealed.
“The first company would stipulate the price at which its competitor should price the tender.
“The company that requested the quotation would also request its competitor to send its quote directly to the customer.
“This type of quotation is known as a cover quote. It is a price provided by a company that wishes to win a tender to another company that does not wish to do so.”
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