Friendship or Foul Play? A Case Study on Bid Rigging in Construction Procurement
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Insight Article miércoles, 2 de julio de 2025 miércoles, 2 de julio de 2025
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Asia Pacific
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Regulatory movement
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Projects & Construction
Just a few months after two interior construction firms were fined nearly S$10 million in December 2024.
Another case1 hit the headlines in Singapore when the Competition and Consumer Commission of Singapore (“CCCS”) imposed a S$4.6 million fine on Hunan Fengtian Construction Group (“HNFT”) and Trust-Build Engineering & Construction (“TB”) in May 2025 for bid-rigging or collusive tendering. This is the latest in a series of infringement decisions involving the construction sector.
What happened in this case?
The primary decision-makers of HNFT, Mr Xing Hongyun (“Xing”) and TB, Mr Wang Jianjun (“Wang”) first met at a construction industry exhibition in Germany sometime in 2009 and continued to keep in contact with each other mostly on developments in the built environment sector.
In 2022, the People’s Association (“PA”) issued three invitations-to-tender for upgrading works at three community clubs (“PA Tenders”)2 . HNFT and TB were amongst the contractors who submitted their bids for these tenders. After receiving information from PA, CCCS commenced investigations into the two companies in 2023, including an unannounced inspection of their business premises and interviews with their personnel.
CCCS found that the companies had exchanged commercially sensitive information, with HNFT preparing various tender documents and proposing the bid prices for TB to submit, so that TB would have a better chance at securing the tenders. HNFT would also submit a higher bid to make TB’s bids appear more competitive.
Both companies raised several defenses, such as lack of intent, no direct benefit, and assertions that they operated independently.
HNFT also claimed that it had planned to discontinue operations in Singapore and was no longer interested in new tenders. As TB did not have a good track record of winning GeBIZ tenders, it wanted to help TB succeed instead “on account of their friendship”. HNFT also hoped that TB could engage Raintree D&B Pte. Ltd. (of which Xing is the sole director) for the tenders or other projects3.
According to TB, it wanted to learn from HNFT’s experience in tender preparation, bidding, and costing for projects. TB explained that it also did not have enough manpower to put together the tender submissions for the PA Tenders. While TB was open to subcontracting some of the works to Raintree if it was successful, this was not a critical factor to TB who could easily engage other subcontractors4.
CCCS rejected their reasons. The detailed WhatsApp conversations between HNFT’s and TB’s senior management were central to CCCS’s findings, highlighting how digital communication records can decisively uncover covert anti-competitive conduct. The evidence (including internal tender preparation documents and inconsistencies in their accounts) clearly showed the PA Tenders “were not independently determined and were submitted in furtherance of collusion or co-operation between HNFT and TB”.
In a nutshell, the distorted competition gave PA the false impression of genuine bidding. By submitting “cover bids” higher than TB’s to create an illusion of competition and boost TB’s chances of winning, the parties were engaging in covert cartel tactics which undermined procurement integrity.
Reminder of strict regulatory stance adopted in Singapore’s construction sector
The decision reiterates fundamental competition law principles that prohibit undertakings from coordinating bids in public tender since this eliminates independent economic decision making. Specifically, Section 34 of the Competition Act 2004 prohibits agreements or concerted practices aimed at restricting competition. Thus, the exchange of information by contractors regarding their intended future prices is generally treated as restricting competition. The CCCS Guidelines on the Section 34 Prohibition also provide other examples of information sharing which may constitute cartel or anti-competitive conduct6.
Even though neither HNFT nor TB won any of the tenders, CCCS imposed hefty fines on them which were aimed at deterring bid-rigging industry-wide7. Contractors should also be aware that besides facing heavy financial penalties, they also risk reputational damage and loss of future work streams altogether if found liable. It is worth noting that liability may extend to individuals involved in such prohibited commercial activity, who may be subject to penalties imposed by CCCS if they fulfill the definition of an “undertaking”8, as well as other enforcement agencies for corrupt practices9.
This reinforces the need for stakeholders in the built environment sector to remain vigilant during the tender processes — even when engaging with long-standing partners or industry peers. While not all exchanges of information are prohibited, it is essential to critically assess the recipient, the nature of the market information being shared, and the purpose behind the exchange, particularly in the context of competitive bidding.
1CCCS, Media Release: CCCS Penalises Contractors Specialising in Non-Residential Interior Fit-Out Tenders for Bid-Rigging, 20 December 2024 at <https://www.cccs.gov.sg/case-register/public-register/agreements-and-collaborations/cccs-penalises-contractors-specialising-in-non-residential-interior-fit-out-tenders-for-bid-rigging>
2CCCS, Media Release: CCCS Imposes A Total Of $4.6m Penalties On Contractors For Rigging Bids In Public Sector Tenders, 23 May 2025 at <https://www.cccs.gov.sg/case-register/public-register/agreements-and-collaborations/cccs-imposes-a-total-of--4-6m-penalties-on-contractors-for-rigging-bids-in-public-sector-tenders>
3CCCS Decision, CCCS Penalises Contractors Specialising in Non-Residential Interior Fit-Out Tenders for Bid-Rigging, 20 December 2024 at <https://isomer-user-content.by.gov.sg/45/77aa6e8f-aecd-43ed-8b6c-79a1abaac794/CCCS%20Infringement%20Decision%20%20Construction%20Tenders%2023%20May%202025.pdf> at [13]
4Id. at [14]
5Id. at [25]
6CCCS Guidelines 2022, CCCS Guidelines on the Section 34 Prohibition, at [3.24]
7See CCCS Financial Penalty Framework at: <https://www.cccs.gov.sg/anti-competitive-practices/legislation-and-guidelines/financial-penalty-framework>
8Section 2 of the Competition Act 2004 defines “undertaking” as “any person, being an individual, a body corporate, an unincorporated body of persons or any other entity, capable of carrying on commercial or economic activities relating to goods or services”.
9CCCS Media Release, CCCS Penalises Company and Ex-Director for Rigging Bids, 5 September 2024, at: <https://www.cccs.gov.sg/media-and-events/newsroom/announcements-and-media-releases/cccs-penalises-company-and-ex-director-for-rigging-bids-245/>
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