The Federal Court today found architecture firm Ashton Raggatt McDougall Pty Ltd (ARM Architecture) and its former managing director, Anthony (Tony) John Allen had attempted to rig bids for a tender relating to a $250 million building project at Darwin’s Charles Darwin University.
The Court ordered ARM Architecture to pay a penalty of $900,000 and Mr Allen to pay a penalty of $75,000.
ARM Architecture admitted it had attempted to engage in cartel conduct when Mr Allen sent emails to eight other architecture firms in September 2020 asking the firms not to bid for the second phase of the university project.
Mr Allen admitted that he had attempted to induce the other architecture firms to make an arrangement or arrive at an understanding with ARM containing a cartel provision.
After the conduct was brought to its attention, Charles Darwin University excluded ARM Architecture from tendering for the project. Mr Allen left ARM in March 2022.
“This judgment should serve as a strong reminder for everyone, including professionals and professional services firms, that bid rigging is against the law, no matter what industry you are in,” ACCC Chair Gina Cass-Gottlieb said.
“When a business attempts to rig a bid or form a cartel, they harm competition by unfairly seeking to advance their interests over those of its customers. When they do so on a public project, they are also doing so at the expense of the public purse.”
ARM Architecture was also ordered to conduct an education, training and compliance program relating to obligations under the Competition and Consumer Act and pay part of the ACCC’s costs.
Mr Allen was also ordered to contribute to the ACCC’s costs, and to seek to have an educative notice about his experience published under his name on the website of the Architects Registration Board of Victoria, as a warning to other professionals.
In his educative notice Mr Allen has agreed to say: “I made a very serious mistake by attempting to induce the other firms to engage in bid-rigging, and this has had serious consequences for me. I have lost my position, my reputation, and my involvement in a profession that I love. Do not do what I did. Learn from my mistakes. Whatever pressure you may be under, and whatever motivation you may have, do not attempt to induce others to engage in cartel conduct.”
“The ACCC has recently enhanced its cartel detection program and we encourage public procurement officials to be alert to the signs of bid rigging and other cartel conduct in public tenders. If they have any concerns, they can report the matter to the ACCC, and they can do so anonymously,” Ms Cass-Gottlieb said.
The orders were made following joint submissions by the parties and the ACCC to the Court, including in relation to the form of final declarations and orders.
Background
ARM Architecture is an architectural firm with offices in Melbourne, Sydney and Adelaide.
The tender process for the Charles Darwin University Project was conducted in two parts. In the first phase, in May 2019, the university invited tenders for the provision of principal design consultant services for the master plan, business case, concept plan and scheme design phase of the project, and ARM Architecture was the successful tenderer.
In the second phase in September 2020, Charles Darwin University invited tenders for principal design consultant services for the design development, construction documentation, construction and defect liability period phases of the project.
The ACCC commenced proceedings against ARM Architecture and Mr Allen in September 2022.
Notes to editors
Bid rigging occurs when two or more competitors agree they will not compete genuinely with each other for tenders, allowing one of the cartel members to ‘win’ the tender. Participants in a bid rigging cartel may take turns to be the ‘winner’ by agreeing about the way they submit tenders, including some competitors agreeing not to tender.
More information on bid rigging can be found on the ACCC’s website at Cartels.
The ACCC investigates cartel conduct and takes civil cartel proceedings in the Federal Court. The ACCC works to detect cartels including through education programs, proactive intelligence gathering and data assessment and working with overseas counterparts to identify cartels that operate on a global level.
The ACCC also manages an immunity program that enables past or present cartel members to confess their actions and cooperate with investigations in exchange for immunity from ACCC-initiated civil and (through the CDPP) criminal proceedings.
The ACCC is using a new screening tool which analyses procurement data from public procurement agencies to identify potential collusion.
Anyone with information about cartel conduct is urged to call the ACCC Cartel Hotline on (02) 9230 3894. You can also report cartel conduct anonymously .
Public procurement officials who want to know more about detecting cartels are encouraged to contact the ACCC Cartel Outreach team at carteloutreach@accc.gov.au.
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.