The Latvian Competition Authority (KP) has decided to terminate its investigation into a potential illegal agreement in public procurement related to catering services. The inquiry was initiated following a complaint from a public procurer who suspected collusion among competitors forming a joint venture and participating in a tender.

In February 2024, the KP received a submission from a public procurer expressing concerns about a joint venture formed by SIA “ALEKS UN V” (AV) and SIA Concord Service Group (CSG), which was participating in a tender for catering services through a jointly established company, SIA “CNC.” The KP noted that AV and CSG were considered competitors and could have individually participated in tenders before forming the joint venture.

During the investigation, the KP conducted procedural actions at the legal and actual addresses of the market participants, obtaining electronic information from their representatives' work computers and mobile phones, as well as verbal explanations. After evaluating the information gathered, the KP performed a detailed economic assessment to ensure the explanations received were consistent with the actual situation and to objectively evaluate the permissibility and legitimacy of such joint participation in the tender.

Consulting with the Procurement Monitoring Bureau, the KP confirmed that the companies' participation in the joint venture was permissible to meet the procurement requirements for necessary industry experience. The investigation revealed that SIA “CNC” was not established through a complete reorganization of AV and CSG, meaning it could not participate in tenders individually, as it could not leverage the prior experience of AV and CSG. Thus, it was concluded that AV, CSG, and SIA “Ēdiens.lv” acted lawfully by submitting bids as a joint venture with SIA “CNC” to accumulate experience for future individual participation in tenders.

Furthermore, the KP verified that AV and CSG were effectively allocating resources to SIA “CNC,” which is now a stable company capable of participating in tenders for catering services individually, provided the procurement regulations allow it.

KP Chairperson Ieva Šmite emphasized that competitor participation in tenders through joint ventures is an allowed form of participation and not a new practice. However, she reminded companies to carefully assess whether joint bidding could distort competition or limit the procurer's choice, and to ensure they can individually meet the tender requirements and justify the need for collaboration.

The KP encourages market participants considering joint participation in tenders to review guidelines on submitting joint bids and to thoroughly evaluate their ability to participate individually.