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Friday, June 13, 2003
FTC blames two institutes for rigging bids
The Fair Trade Commission determined Thursday that two semigovernmental research institutes have been rigging bids regularly since at least 1999, artificially inflating prices on 327 research contracts.
The bids, for contracts worth 3.18 billion yen in total, were for research projects on the market prices of construction materials in the Kanto region.
The two public-interest institutes are the Economic Research Association (Keizai Chosa Kai) and the Construction Research Institute (Kensetsu Bukka Chosakai). Both are based in Chuo Ward, Tokyo, and are affiliated with and under the supervision of the Land, Infrastructure and Transport Ministry.
The FTC issued a recommendation Thursday that the two bodies accept the determination and stop rigging bids within two weeks.
If they refuse, hearings at the commission would be initiated and could possibly result in a court battle.
The two key research institutes have effectively monopolized the construction material market-price research that determines the price data used by most government-related bodies to estimate costs for public work projects.
The two institutes, who have hired a number of former land ministry officials, publish the market-price data in monthly periodicals. But governments and government-related bodies invite bids for price research to cover materials not covered by the monthlies.
The two institutes conspired and jointly decided the bid-winner in advance for the bids for research contracts at governments and government-related bodies in Tokyo and Ibaraki, Tochigi, Gunma, Saitama, Chiba, Kanagawa, Yamanashi and Nagano prefectures, according to the FTC.
A source at the Economic Research Association told The Japan Times the two institutes even often exchanged pricing data to inflate public works budgets in favor of construction firms and construction-material makers.
But the FTC declined to comment on that point, saying Thursday's determination concerns bid-rigging to win contracts for research, not the results of price surveys.
The FTC raided the two institutes' offices across the country a year ago, suspecting they rigged bids nationwide, not only in the Kanto region.
But the FTC was able to obtain evidence that can substantiate suspicions on bid-rigging only in the Kanto area, which accounts for about 30 percent of all the similar pricing data research contracts in Japan, the FTC said.