Les Entreprises Promécanic Ltée (Promécanic), a ventilation company based in Laval, Québec, has pleaded guilty to three criminal charges of bid-rigging for tenders issued by its contractors in 2004 and 2005. On July 19, 2011, Promécanic was fined C$425,000 by the Superior Court of Québec for participating in agreements to fix the outcome of bids for the installation of residential ventilation systems in Montreal.
In December, 2010, the Competition Bureau’s investigation of eight ventilation systems companies culminated in the laying of criminal charges for bid-rigging against Promécanic and seven others. Bid-rigging, which is defined in section 47 of the Competition Act, prohibits bidders from entering into an agreement not to submit bids or to submit pre-arranged bids when responding to a bid or tender call. The criminal sanction under section 47 applies if the person calling for the bids is not made aware of the agreement at or before the time when the bid or tender is submitted or withdrawn. In this case, the Bureau’s investigation found evidence of collusion among the eight ventilation companies in five separate competitive bidding processes valued at approximately C$8 million. The maximum penalties for bid-rigging include a fine that is at the discretion of the court and/or a prison term not exceeding 14 years.
Promécanic admitted to secretly arranging with its competitors to fix the price of the winning bids for ventilation systems contracts in the Montreal region. In addition to fining Promécanic C$425,000, the Quebec court issued a 10 year prohibition order against the company’s estimator, Joël Perreault, preventing him from engaging in acts that could lead to further contraventions of section 47. Mr. Perreault was charged in 2006 with obstructing the Bureau’s investigation of Promécanic by destroying documents during the execution of a search warrant. In exchange for his subsequent cooperation in the Bureau’s prosecution of the other seven defendants, the obstruction charges against Mr. Perreault were dropped.
The investigation and prosecution of cartels and related bid-rigging offences under Part VI of the Competition Act is a top priority for the Commissioner of Competition, Melanie Aitken. “The Competition Bureau will continue to vigorously seek prosecution against those who thwart the forces of competition” Aitken said. “Homeowners in the Montreal region were defrauded by this illegal scheme”, she commented, adding that “bid-rigging deprives Canadians of the benefits of a competitive market, including lower prices and product choice”. The other seven companies facing charges in the Bureau’s bid-rigging investigation include Groupe SCV Inc., Les Entreprises de Ventilation Climasol Inc., Lys Air Mécanic Inc., Guaranteed Industries Ltd., Ventilation G.R., Kolostat Inc., and Ventilex Inc. More information can be found here