Potential fraud in Amsterdam tenders under investigation

The Netherlands' authority for consumers and markets ACM launched an investigation into whether contractors made illegal price agreements in the ground, road and hydraulic engineering sector in the municipality of Amsterdam. The ACM received tips that different contractors made potentially forbidden agreements in government tenders, such as making agreements on the level of prices quoted to ensure who will receive the contract, NU.nl reports.

If this is true, the contractors distorted the competition and that may lead to higher prices, lower quality or less innovation, according to ACM. The regulator raided several companies during the past month as part of this investigation. The tenders under investigation are for projects that involve amounts between 100 thousand euros and 2 million euros.

The government spends billions every year through tenders. Entrepreneurs compete with each other for a project - the company that offers the best price and quality wins the project.

"Secret price agreements between entrepreneurs during a tender distort competition and can lead to higher project costs for the government", the ACM said. "The Competition Act prohibits agreements that distort competition. Ultimately, the taxpayer pays the higher bill."