'He's offered me bloody money': Court rules building director attempted to rig National Gallery tender bid

A Canberra business and its sole director have been found guilty of attempting to rig a tender for work at the National Gallery of Australia with the aim of making sure he won the bid.

The ACCC began civil proceedings against Delta Building Automation Ltd (Delta) and its director Timothy Davis in Federal Court in 2021, accusing him of attempted cartel conduct over the tender to replace and maintain a building management system at the ACT-based gallery.

The Federal Court found Davis had organised a meeting at a Canberra cafe in December 2019 with the general manager of one of his business’s competitors.

During this meeting, Davis tried to convince the competitor to make a deal so that Delta was more likely to be successful in winning the tender.

In his affidavit evidence in chief to the court, the general manager said Davis had tried to bribe him.

“[Davis said] Look mate, I know you’ve had a long association with the gallery. To appease you, I would like to offer you a payment so that you are not wasting your time … there will only be two tenderers and I am confident to win even from second place,” the court document stated.

“[I responded] Look Tim, thanks for the offer but, if we get the opportunity to tender for this project, we will do our best to put forward a competitive bid in an attempt to win it. I won’t be doing anything else.”

The general manager then went home and told his wife what had happened, stating “he’s [Davis] offered me bloody money”.

In his affidavit evidence in chief Davis disputed this recollection of their meeting, stating instead he had expected to win the tender and was offering his competitor the chance for some subcontracting work.

“[I said] I might need to subcontract you to help us with the integration and maybe I can do something to pay you the margin you might have lost by us getting the service contract,” Davis claimed.

“I might be able to add some additional margin to my price and write you an order for a few more dollars.”

Ultimately the proposed arrangement or understanding was not made, which the ACCC alleged was because the competitor rejected Davis’ offer.

The Court ended up agreeing with the general manager’s recollection of events, describing Davis’ account as “implausible and inconsistent”.

ACCC chair Gina Cass-Gottlieb said Delta and Davis’ attempt to bid rig for the tender was a “serious matter”, particularly given it was for a government institution, as it had the potential to increase the cost of the project to taxpayers.

“Attempting to agree to the terms of bids with competitors, just like agreeing to share markets or allocate customers, is anti-competitive conduct which is against the law,” she said.

“Bid rigging damages markets by driving up prices to the detriment of consumers, other businesses or taxpayers.”

The ACCC did not allege any involvement by the National Gallery of Australia in the conduct of Delta or Davis, and it ultimately did not suffer any losses.

A third party ended up winning the bid.

The Federal Court will now decide on penalties and other orders at a later date.

In a statement, the ACCC said it was seeking declarations, pecuniary penalties, injunctions and costs, as well as an order disqualifying Mr Davis from managing a company, and orders for Delta to conduct compliance training.