Advisory to a government agency on evaluation of tender submissions by two consortiums involving related companies

CCCS was asked to advise on the evaluation of tender submissions where bids were received from two consortiums involving related companies. In particular, a Company X that was part of one of the consortiums was a parent company of another Company Y that was part of another consortium bidding for the same tender.

CCCS advised the government agency that the bids from the two consortiums may not be independent to the extent that Company X, being Company Y’s parent, may coordinate the bids of the two consortiums. Even if the firms within each consortium are not competitors, but firms in different consortiums are competitors, to the extent that Company X may facilitate the coordination of the bids of the two consortiums with the knowledge or agreement of the competing firms in different consortiums, competition concerns may arise.

CCCS advised the government agency to request the two consortiums to each submit reasons for participating as a consortium as opposed to individually, to assess whether it was reasonable for these companies to form the consortiums and to ascertain that there are some benefits to the government agency arising from the arrangements. In the absence of more detailed information on the roles that Companies X and Y had played in the bids by the two consortiums, CCCS advised treating the bids by the two consortiums as non-independent, similar to receiving two bids from the same bidder or from related companies.