Public sector procurement is a multi-billion-dollar sector. It makes a vital contribution to the Australian economy and the welfare of Australians, who have the right to expect competitive bidding for these projects, resulting in value for money.
In 2018, Charles Darwin University announced plans for a new $250 million Education and Community Precinct in the heart of the Darwin CBD. The project is primarily funded by the Commonwealth Government and the university.
ARM Architecture was awarded the contract for principal design and consultant services under the first phase of the project after a tender in May 2019.
In September 2020, the tender for the second phase of the Charles Darwin University project was issued. It is alleged that following the issue of the tender, emails were sent to eight other architectural firms requesting them not to submit a bid for the second phase of the Charles Darwin University project.
It is alleged that in doing so, ARM Architecture attempted to rig or induce other competitors to agree to rig the tender for principal design consultant services. Once Charles Darwin University became aware of the alleged conduct, ARM Architecture was excluded from consideration for the second phase of the building project, which was valued at about $2.6 million plus GST.
Bid rigging for tenders, whether the tenders take place in the public or private sector, is against the law. This type of cartel conduct increases the costs of tenders for businesses or taxpayers, and has a chilling effect on competition. Professional services firms, including architects, should ensure they compete fairly and do not engage in anti-competitive behaviour, including cartel conduct.
The case will be listed before the Federal Court at a date to be set.
Notes to stakeholders
Bid rigging occurs when two or more competitors agree they will not compete genuinely with each other for tenders, allowing one of the cartel members to ‘win’ the tender. Participants in a bid rigging cartel may take turns to be the ‘winner’ by agreeing about the way they submit tenders, including some competitors agreeing not to tender.
ARM Architecture is an architectural firm with offices in Melbourne, Sydney and Adelaide.
The tender process for the Charles Darwin University Project was conducted in two parts. In the first phase, in May 2019, the university invited tenders for the provision of principal design consultant services for the master plan, business case, concept plan and scheme design phase of the project, and ARM Architecture was the successful tenderer.
In the second phase in September 2020, Charles Darwin University invited tenders for principal design consultant services for the design development, construction documentation, construction and defect liability period phases of the project.