Former director fined €45,000 for bid-rigging tenders

June 20, 2018

The Court of Criminal Appeal today increased a fine handed down to a former director, Brendan Smith, for engaging in bid-rigging in the procurement of flooring contracts. Mr Smith, who is a former director of Aston Carpets & Flooring, was originally fined €7,500 and must now pay €45,000 following today’s ruling.

In 2017, Brendan Smith and Aston Carpets pleaded guilty to implementing and taking part in an anti-competitive agreement. Mr Smith was also convicted of impeding a criminal prosecution. This followed an investigation by the Competition and Consumer Protection Commission (CCPC) and subsequent prosecution by the Director of Public Prosecutions (DPP). The convictions of Brendan Smith and Aston Carpets were the first for bid-rigging offences in Ireland. The original sentences imposed by the Central Criminal Court on 31 May 2017 were appealed by the DPP on the basis that they were unduly lenient.

Speaking today about the sentencing, Isolde Goggin, Chairperson of the Competition and Consumer Protection Commission said:

“We welcome that the Court of Criminal Appeal recognised that the original sentence given was not only lenient but unduly lenient, and that the Court increased the fine against this individual.

The State and private businesses use competition in a tender process to obtain the best value for money possible. Firms who compete in a tender are driven by the competitive process to reveal how low they are actually willing to price a particular job at. If two or more firms agree to rig the bidding process they undermine this in a secret and covert manner which will lead to higher costs for businesses and ultimately consumers. At a time when Ireland is preparing for the impact of Brexit, maintaining our competitiveness and attractiveness as a good place to do business is essential. Anti-competitive conduct increases the cost of goods and services and may make Ireland less attractive for foreign direct investment. Bid-rigging also has a detrimental effect on law-abiding companies in Ireland who seek to compete for work fairly.

As a result, in 2018 procurement continues to be a significant priority for the CCPC, and we continue to work with state agencies and organisations to develop awareness of the warning signs of bid-rigging and explore the potential of developing screening processes that will both detect and deter bid-rigging generally.”

In addition to pleading guilty to bid-rigging offences, in May 2017, Mr Smith was also convicted of impeding a criminal prosecution. At the time Mr Smith was given a three-month suspended sentence plus a fine of €7,500 and disqualified from acting as a company director for a period of five years in accordance with section 839 of the Companies Act 2014. The judge also imposed a fine of €10,000 on Aston Carpets. Today, the Court of Criminal Appeal increased the fine to €45,000 whilst the fine handed down to Aston Carpets remained unchanged.

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