Enterprises can participate in a tender as a consortium. However, if they are able to execute the contract independently, then cooperation with other entities may result in the restriction of competition. A Polish Appellate Court has confirmed the reasoning of the country’s competition Authority, UOKiK.

The Court’s judgment concerns an UOKiK decision from December 2012. That decision found that during a tender for the collection and transport of municipal waste, organised by Zarząd Mienia Komunalnego (the municipal property authority) in Białystok, an irregular agreement between enterprises took place. The tender was won by a joint offer made by MPO and Astwa, the two largest companies operating in the city. The two had forged the consortium to address technical constraints which prevented them from applying independently for the contract. While joint participation of two independent enterprises in a tender procedure is permitted by law, if the enterprises can provide the services themselves, and cooperation is not necessary, creating a consortium may raise suspicions of illegal cooperation that restricts competition. The evidence collected in the case showed that the aim of the agreement was to preserve the existing market shares without triggering any mechanisms of competition. 

UOKiK acknowledged the existence of collusive tendering, but decided not to impose any financial penalties on Astwa and MPO. The decision was intended to be of a preventive nature and to indicate what actions may be considered anti-competitive.

The enterprises appealed to the Court of Competition and Consumer Protection, which annulled UOKiK’s decision. However, the Appellate Court subsequently overturned that judgement and confirmed UOKiK’s reasoning.

In its oral justification, the Appellate Court stated that even if the law allows enterprises to create consortia, UOKiK still has the right to verify if the cooperation between companies does not infringe competition law. The court also emphasised that when considering the independent performance of a contract by an enterprise, its potential must be analysed. Although the companies did not have resources enough for an independent launch at the time the consortium was set up, they were able to make up for these deficiencies and submit separate tenders. The court also pointed out that some companies with a small market share entered the tender procedure independently. In the opinion of the Appellate Court, this ultimately proves that MPO and Astwa, the largest entities operating on the waste collection market in Białystok, could have submitted separate tenders. It also denies the idea and purpose of a consortium admitted by the Public Procurement Law and attests to the unlawfulness of their agreement.

Collusive tendering was the topic of the conference Collusive tendering – myth or actual threat?  held June 20th at UOKiK’s main office in Warsaw. It was organised by the International Chamber of Commerce. Representatives of state institutions, businesses, and legal circles discussed possible forms of cooperation between enterprises vying for a public contract.

Additional information for the media:

Press Office, UOKiK
Pl. Powstańców Warszawy 1, 00-950 Warsaw
Phone.: +48 22 827 28 92, +48 22 55 60 314, +48 22 55 60 430
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