Three cooperatives and seven companies that split winning order and quantities for more than five years in a procurement bid for corrugated conduits to protect power cables ordered by the Korea Electric Power Corporation (KEPCO) have been sanctioned by the Korea Fair Trade Commission.
The Korea Fair Trade Commission (FTC) said on the 26th that it issued corrective orders and imposed a total penalty surcharge of 868 million won on three cooperatives and seven businesses on suspicion of agreeing in advance on the expected winner and the ratio of winning quantities in bids to purchase corrugated conduits ordered by the Korea Electric Power Corporation (KEPCO). Corrugated conduits are plastic pipes that encase and protect power cables.
The three cooperatives are the Korea Synthetic Resin Corrugated Conduit Business Cooperative (Corrugated Conduit Cooperative), the Korea Plastic Technology Research Business Cooperative (Plastic Cooperative), and the Korea PE Pipe Industry Cooperative (PE Pipe Cooperative), and the seven businesses are Youngjin Industry Co., Ltd., P&I Co., Ltd., Sejin Engineering Co., Ltd., Shinho Co., Ltd., Green Auto Tech Co., Ltd., COB International Co., Ltd., and Oju Industry Co., Ltd.
From June 2018 to January 2023, the Corrugated Conduit Cooperative and the Plastic Cooperative took part in a total of 384 nationwide bids for round corrugated conduits after setting the winning order in advance as agreed. As a result, the Corrugated Conduit Cooperative won 204 bids and the Plastic Cooperative won 175 bids, and it was found that 379 out of all 384 bids were awarded in line with the agreement.
In region-restricted bids for helical corrugated conduits as well, the three cooperatives agreed to split the winning quantities in proportion to the number of member companies in 10 bids held from November 2017 to December 2022. In fact, all 10 cases were allocated quantities similar to the agreed ratios.
Seven member companies belonging to the Corrugated Conduit Cooperative also took part in the concerted practice by joining so-called "straw bids," despite knowing about the collusion. When the cooperative's bidding manager could not bid directly due to vacation or other reasons, the manager contacted member companies and asked them to submit bids in the set order.
This case is one where the Korea Fair Trade Commission (FTC) detected signs of collusion through its "bid-rigging indication analysis system" and uncovered it ex officio. The Korea Fair Trade Commission (FTC) said, "Even an eligible cooperative that bids on behalf of small and midsize enterprises will face stern sanctions if it engages in bid rigging," adding, "Member companies that joined knowing about the collusion are also subject to sanctions, even if they did not lead the concerted act."