DXC Technology named as participant in bid-rigging cartel
Agreed bid prices in advance with local rival for work in Australian mining camps
DXC has been named as a participant in a cartel that rigged bids for work in Australia.
Australia’s Competition and Consumer Commission today shared news that a local IT services outfit named Swift Networks Pty Ltd admitted it engaged in cartel conduct alongside DXC.
“Swift … agreed with a competitor, DXC Connect Pty Ltd and DXC Technology Australia Pty Ltd, that one of them would submit a higher price than the other in response to a request for bids,” the Commission wrote. The regulator stated the contracts covered comms kit, something described as “entertainment solutions”, plus services to provide Wi-Fi and internet connectivity to rooms and communal areas across mining sites.
The three sites are iron ore mines located in remote areas of Western Australia. Two of the gigs were with mining company Rio Tinto and a third slab of work was for Fortescue Metals Group.
The companies' mine sites are all remote, hot, and so inhospitable that many workers fly in for two-week stints of work and stay in company housing – hence the need for Wi-Fi and entertainment solutions.
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Delivering any services to those locations is expensive and IT services’ providers costs will be high. Staff need to travel long distances to the sites. It's an environment so unusual that staff are paid above market rates for similar jobs in nicer places.
But the mines also offer big opportunities for technology to shine: mining companies in the region have pioneered self-driving trucks and trains, and have sufficient IT requirements that Australian data center operator NEXT DC will build a facility in the region.
Winning work in the mines could therefore be a shop window for huge future opportunities. And when we say huge, we are not exaggerating: over 100 million tonnes of iron ore passes through local ports in a busy month, the value of annual exports topping AU$130 billion ($80 billion) in big years.
DXC and Swift appear to have decided to make sure both had a chance to get in on the action.
Swift has now been ordered to pay a penalty of AU$1.2 million ($750,000) for its part in the cartel.
The Register has asked DXC for comment. If we receive substantive material, we will update this story.
“We have taken this case as a reminder to businesses that we take this type of anti-competitive conduct extremely seriously and will always take appropriate action,” states a canned quote from ACCC Commissioner Liza Carver. “Bid rigging is a serious breach of competition laws. Cartel conduct such as this can lead to higher prices for other businesses, and ultimately consumers.” ®