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CADE launches proceeding to investigate cartel in outsourced services procurement

Cartel

More than 50 procurement processes had signs of collusion
published: Sep 16, 2021 08:43 PM last modified: Sep 16, 2021 08:43 PM
by International Unit

On Tuesday (14 September), the Office of the Superintendent General of CADE (SG) launched an administrative proceeding against 42 companies and 43 individuals to probe allegations of a cartel in public and private procurement for outsourced services.

The investigation started in 2015, based on a complaint brought by a member of CADE's procurement and contracts unit, who found signs of potential wrongdoings in an online reverse auction for hiring fire brigades and firefighting and fire prevention outsourced services.

The SG used tools developed by the agency’s Cérebro Project – such as screening and data mining tools – to find out if other companies, omitted from the initial complaint, participated in the anticompetitive conduct.

After the initial investigation, the SG found evidence that a group of companies operated in coordination in at least 4,700 procurement processes. Following, the SG shared this evidence with the Department of the Federal Police (DPF), which resulted in a police operation named "Ponto de Encontro", initiated in October 2018. During the probe, investigators executed search and seizure warrants at 13 companies established in the Federal District.

Additional signs of communication between companies were collected, confirming the results found by the econometric tools of the Cérebro Project. In examining the extensive evidence produced by the criminal investigation, the SG and the DPF detected collusive behaviour in more than 50 (private and public) procurement processes, which may have been affected by the alleged cartel.

Once the administrative proceeding commences, the defendants will be notified to file their answers. After the discovery phase, the SG either finds the defendants guilty or dismiss the case, submitting it to the agency's Tribunal for a final decision.

Cérebro Project

Launched in 2013, the Cérebro Project develops tools and techniques for investigating cartels. It uses information technology to develop screening and data mining tools aimed to identify suspicious behaviour in public procurement. The project’s team has shared experiences and techniques with members of the antitrust agencies of Switzerland, England, Netherlands, amongst others.

Access the Administrative Proceeding no. 08700.004914/2021-05.