Tender Conspiracies - Nutritional Equipment - Regional Public Hospitals

The Business Competition Supervisory Agency (Komisi Pengawas Persaingan Usaha / KPPU) recently handed down its decision in a case that involved the procurement of nutritional equipment by the A. Wahab Sjahranie Samarinda Regional Public Hospital (RSUD Samarinda). The alleged conspiracy relates to a tender undertaken in 2006 and the preliminary examination was based on a report to the KPPU that stated that there had been a breach of Article 22 of Law No. 5 of 1999 on the Prohibition on Monopolistic Practices and Unfair Business Competition (Anti-Monopoly Law).

There were 7 parties involved in the alleged conspiracy and each was found to be in breach. The KPPU stated that there had been a 'vertical' conspiracy in that the RSUD Samarinda had facilitated the winning bid and consequently was in breach of Article 22. The Reported Party II (CV RISA) and the Reported Party III (PT Binaco Group) were fined IDR 1 billion each. Reported Parties IV, V, and VI (CV Fadlan Prima, CV Citra Selaras Abadi, and PT Cahaya Bulu Mampu) are prohibited from participating in any tenders undertaken by the East Kalimantan Regional Government for a period of 2 years and fined IDR 1 billion. The fine is suspended provided that the parties implement the decision of the KPPU. Reported Party VII is prohibited from offering their nutritional equipment through third parties in tenders throughout East Kalimantan for a period of 1 year. Finally, there is an order from the KPPU that Reported Party I improve its management processes particularly as they relate to procurement matters.