Companies in SAAF tender collusion fined R2 million plus


It’s taken the Competition Commission and its tribunal over five years to rule on a collusive tendering issue for the SA Air Force (SAAF) with penalties in excess of R2 million imposed on both parties involved in a network maintenance and support services contract.

The firms involved were KF Computers and Saab Grintek Defence a Competition Tribunal statement has it saying both “network maintenance firms agreed to pay penalties for allegedly colluding with each other” on a SAAF tender.

Both companies deny contravening the Competition Act and concluded separate agreements with the Competition Commission to settle the penalties levied. KF Computers will pay R32 135 and Saab Grintek R2 million. The Competition Tribunal notes the Highveld Techno Park, Centurion-based company made additional commitments to “benefit supplier development”.

Saab Grintek, the statement says, does not admit to acting in contravention of the Competition Act. Notwithstanding, the Commission agreed to the settlement without an admission of liability. This was because Saab Grintek never contravened the Competition Act previously, its business is now mainly export driven and a commitment to “substantially increase” its enterprise and supplier development programme was made.

KF Computers similarly did not admit to contravening the Competition Act. Taken into mitigation when deciding on a financial penalty was it, like it alleged collusion partner, was not a previous offender. It is also “a small firm” and “protracted and costly litigation” is not considered worthwhile.

The collusive tendering was for provision of network maintenance and support services for the SAAF’s ground command and control systems (GCCS) and current intelligence system (CURIS), crucial for air force operational intelligence and planning.

As background the Competition Tribunal said the investigation found on or about January 2016, Saab assisted KF Computers to complete its tender documents and, in turn, Saab’s tender pricing was higher to ensure KF would win the tender. The Commission concluded conduct between KF and Saab amounted to collusive tendering in contravention of the Act.