The Commission on protection of competition has addressed allegations for cartel agreement between “Cavaler Union 2001” EOOD, “Technomat-Mercury” EOOD and Labor-producing cooperation for handicapped “Zdravohod” for manipulating numerous public procurement procedures

By Statement № 565/15.06.2023 g., issued in case № CPC/174/2022, on the grounds of art. 74, para. 1, item 3 of the LPC, the Commission has addressed allegations for committed infringement of art. 15 of the LPC, art. 1, manifested in a prohibited agreement for manipulating numerous public procurement procedures conducted by different contracting authorities in Bulgaria. The addressees of the Statement are “Cavaler Union 2001” EOOD, “Technomat-Mercury” EOOD and Labor-producing cooperation for handicapped “Zdravohod”.

The proceedings before the CPC have been initiated ex officio upon a signal filed by theMinistry of defence containing suspicions about anti-competitive behavior of “Cavaler Union 2001” EOOD, “Technomat-Mercury” EOOD. In the preliminary investigation the CPC has established circumstances that rise reasonable suspicions for prohibited agreements and/or concerted practices from the participation in tender procedures with a subject “supply of shoes” and “supply of professional clothing” of the mentioned in the signal companies, as well as other economic entities.

After the initiation of proceedings, the CPC has received a signal from the Ministry of Interior containing allegations for committed infringement of art. 15 of the LPC concerning the behavior of the same undertakings in the procedures conducted by the authority for the awarding of public contracts for the supply of professional clothing and shoes.

In the proceedings initiated, the Commission has gathered and analyzed information about the participation of the defendant companies in a wide volume of public procurement procedures with a subject “delivery of shoes”. The Commission has analyzed in detail the participation of the defendants in 10 tender procedures for determination of contractor, 6 procedures for framework agreements and 28 procedures for internal competition selection on the basis of a framework agreement, all with the subject “delivery of shoes”.

Based on the evidence collected, the Commission considers that the addressees of the Statement of Objections № 565/15.06.2023 g., “Cavaler Union 2001” EOOD, “Technomat-Mercury” EOOD and Labor-producing cooperation for handicapped “Zdravohod” participated in a prohibited agreement and/or concerted practice – cartel by § 1, unit 5 of the LPC, having as object prevention, restriction or distortion of competition in the market for production and sale of professional work shoes on the territory of the country via manipulating public procurement procedures, conducted by different contracting authorities, by fixing prices and sharing markets by the terms of art. 15, par. 1, unit 1 and 2 of the LPC.

Within 30 days, the addressees of the Statement have the right to submit written objections to the allegations submitted. The time limit shall begin from the day of receipt.

The Commission highly appreciates the vigilance of the contracting authorities in conducting public procurement procedures and submitting notifications in case of suspicions of anti-competitive behavior of the participants. This is of prime importance for the fight against bid rigging.