Delta Building Automation found guilty of rigging attempt for National Gallery tender

Delta Building Automation found guilty of rigging attempt for National Gallery tender

The National Gallery of Australia. Photo credit: Rory Gardiner, courtesy of National Gallery of Australia.

The Federal Court has found that Canberra-based Delta Building Automation and its sole director Timothy Davis engaged in tender rigging for a contract sought by the National Gallery of Australia.

The finding follows a long-running investigation by the Australian Competition and Consumer Commission (ACCC) which launched civil proceedings in the Federal Court against Delta and Davis in May 2021.

While a decision has been made against the respondents, a penalty has yet to be issued.

The ACCC had alleged that Delta had engaged in bid rigging, or collusive tendering, over a contract for the replacement and ongoing maintenance of the National Gallery’s building management system.

In a statement issued today, the ACCC says the Federal Court found that Davis had offered to pay the competitor in exchange for agreeing to the proposed arrangement which would have rigged the bid for the National Gallery’s building management system.

However, the ACCC notes that the National Gallery did not suffer financial loss from the tender rigging.

The Federal Court action stems from a meeting at a café organised by Davis in December 2019 with the general manager of one of Delta’s competitors.

“The court found that during the meeting, Mr Davis attempted to induce the competitor to enter into an arrangement or understanding, so that Delta was more likely to be successful in winning the tender,” the ACCC says.

The court found that Davis had offered to pay the competitor in exchange for agreeing to the proposed arrangement which would have rigged the bid for the National Gallery’s building management system tender.

However, the attempt at rigging the tender failed because the competitor’s general manager had rejected the offer by Davis.

Building management systems are used to manage and monitor equipment such as air-conditioning, ventilation, lighting, and power systems.

Delta Building Automation is part of the Delta Group which is the exclusive Australian distributor for the Delta Controls building management systems.

“The attempt by Delta and Mr Davis to bid rig for the tender of a government institution like the National Gallery of Australia is a serious matter as it had the potential to increase the cost of the project to taxpayers,” says ACCC chair Gina Cass-Gottlieb.

“Attempting to agree to the terms of bids with competitors, just like agreeing to share markets or allocate customers, is anti-competitive conduct which is against the law. Bid rigging damages markets by driving up prices to the detriment of consumers, other businesses or taxpayers.

“Businesses must be vigilant when they are dealing with competitors to ensure that any discussions do not propose or lead to anti-competitive arrangements, including cartel conduct.”

Davis declined to comment on the Federal Court finding after being contacted by Business News Australia.

The ACCC’s action follows a number of high-profile wins by the consumer watchdog in its efforts to clamp down on cartel conduct by businesses.

Among the companies caught out by the ACCC in the past year are BlueScope Steel (ASX: BSL), Alkaloids of Australia and Bingo Industries.

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