Robert Buckler B.A., M.Ed., R.C.M., OLCM Condominium Consultant Beredan Management & Consulting Inc. Broker, Century 21 Heritage Group Ltd.
Kateryna Polek Kateryna Polek, B.Com., RCM, OLCM, CPM Senior Condominium Manager Nadlan-Harris Property Management Inc.
Fair Competition
The Impact of Bid-Rigging Introduction In 2012, the Competition Bureau began a probe into a potential bid-rigging cartel by four companies specializing in condominium common element refurbishment projects. On January 17, 2022 CPL Interiors Ltd., pled guilty to criminal charges of violating the Competition Act. As part of its guilty plea, CPL agreed to pay a fine of just under $800,000 (for full details, please view reference #2, below) and agreed to pay $550,000 into a class action settlement fund. While court proceedings are still ongoing against the three remaining accused companies, the fine paid by CPL Interiors Ltd. pales in comparison to the $19 million worth of contracts which were subject to bid-rigging and which were completed between 2009 and 2014. In light of this malfeasance, including the fact that some or all of these companies continue to carry on business under different names, the condominium management industry and the Condominium Management Regulatory Authority of Ontario have not publicized the investigation, subsequent charges, and what it means to condominium buildings and their Boards. What is Bid-Rigging? In order to fully appreciate the impact of this case, we must first define what bidrigging is and how it works. Bid-rigging is a scheme in which companies manipulate the tender process to contrive a de-
sired outcome. It is defined as the submission of a bid or tender that is arrived at by agreement between 2 or more tenderers where the agreement is not made known to the person calling for the bids or tenders. Victims in these types of situations are consumers, who are forced to pay over-inflated prices. In this instance, it was condominium homeowners who suffered the consequences.
Bid-rigging can take many forms, and is often very difficult to detect. The Competition Bureau identifies four types of rigging schemes: cover bidding, bid suppression, bid rotation, and market division (for full details, please view reference #3, below). With growing sophistication of malfeasance across all industries, Boards are expected to do more to protect their CONDOVOICE SPRING 2022
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ILLUSTRATION BY JASON SCHNEIDER
What is Bid Rigging and How to Reduce the Risk
