16 July 2015

German FCO imposes fines of €1.3 million on three suppliers of German armed forces

On 16 July, the German Federal Cartel Office (FCO) imposed fines totalling €1.3 million on three manufacturers of so-called rubber track pads and vibration dampers for military track vehicles. The companies which have been fined for price fixing are suppliers of the German Federal Armed Forces (Bundeswehr). The FCO found that the companies had agreed their individual pricing and mutual sub-contracting agreements in regard to public tenders organized by the Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support between 2010 and 2014.

The Bundeswehr has a permanent demand for the products concerned as they wear out quickly, meaning they have a limited lifespan.  Rubber track pads are made of rubber and stabilized by base and intermediate plates. They are mounted on track vehicles to protect the road surface from being damaged. Vibration dampers are rubber-to-metal products which are used to mount radio equipment into military vehicles in order to minimise the damage caused to the equipment by the vibration of the vehicles. To meet its demand for these products, the Bundeswehr organises tender processes on a regular basis.

The companies involved were GMT Gummi-Metall-Technik GmbH, Paar Logistik GmbH, and Willbrandt KG. Another company involved in the agreements, Diehl Defence Land Systems GmbH, was granted immunity from fines for disclosing the cartel to the FCO in accordance with the FCO's leniency notice.

All of the companies are reported to have received a reduction in fines for cooperating with the FCO. The decision is final and cannot be appealed. However, as collusive behaviour in public tender processes is a criminal offence under Section 298 of the German Criminal Code, the FCO has passed on to the Public Prosecution Service proceedings against those individuals involved in the conduct.

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