The Competition Tribunal has announced that two separate settlement agreements have been concluded with two companies, regarding alleged collusion regarding a South African Air Force (SAAF) tender. The tender concerned the maintenance of ground command and control systems and intelligence system networks, plus the provision of support services. The companies concerned were KF Computers and Saab Grintek Defence.

The Competition Commission investigated both enterprises with regard to the SAAF tender, finding that, around January 2016, Saab Grintek Defence had helped KF Computers to fill in the tender documents and had then priced its own tender response higher than that of KF Computers, thereby ensuring that the latter company would win the tender. The Commission concluded that this was collusive tendering, violating section 4(1)(b)(ii) of the Competition Act.

However, both companies denied contravening the Competition Act. But both have also agreed to pay financial penalties.   

KF Computers has agreed to pay a penalty of R32 135 and has committed itself not to violate, in any way, the Competition Act in the future. It continued to maintain that it did not break the law. The Competition Commission agreed to the settlement because KF Computers had never previously violated the Act, because it was a small company and because it was simply not worth the Commission’s while to engage in costly and lengthy litigation with such a small company over such a small tender.

Saab Grintek Defence has agreed to pay a R2-million penalty. Further, it will not break the Competition Act in the future and will continue to execute and monitor a competition law compliance programme. Moreover, the company will increase its Enterprise and Supplier Development Programme by a specified minimum amount over the next financial year, to increase the number of enterprises owned by historically disadvantaged people in its supply chain. Again, the company did not admit to having violated the Competition Act.

The Competition Commission gave three reasons for accepting the settlement with Saab Grintek Defence. They were: the company had never broken Competition law before; its business was now mainly focused on exports; and, the abovementioned commitment by the company to significantly enlarge its Enterprise and Supplier Development Programme.