Australia's competition watchdog has launched legal action against a Melbourne architecture firm, alleging it engaged in "cartel conduct" by trying to rig a bid in the design of a new $250 million Charles Darwin University campus.
Plans for the new precinct located in Darwin's CBD were unveiled in 2018 with two tenders for its design awarded in 2019 and 2020.
The project has received funding from both the Commonwealth and CDU, including through the Darwin City Deal.
The Australian Competition and Consumer Commission on Friday announced it was launching civil proceedings against Ashton Raggatt McDougall (ARM Architecture) and its former managing director, Anthony John Allen.
The watchdog alleges Mr Allen, which won the first principle design tender in 2019, emailed eight other architectural firms requesting them not to bid for the second tender in 2020.
The ACCC said Mr Allen is accused of trying to induce competitors to join in rigging CDU's tender process.
The commission's statement said this constitutes bid rigging, in which two or more competitors agree to not compete against each other for tenders.
"This type of cartel conduct increases the costs of tenders for businesses or taxpayers, and has a chilling effect on competition," ACCC Chair Gina Cass-Gottlieb said.
The ACCC said it was seeking declarations, pecuniary penalties and costs, as well as orders for compliance training.
Email revealed in legal documents
In documents filed by the ACCC with the Federal Court, the watchdog alleges Mr Allen sent an email in September 2020 before retracting it five days later.
In the email, Mr Allen wrote:
Mr Allen: Our request to you is simple. Please do not submit a tender as we are relying very heavily on continuing with this project to keep our practice alive throughout the remainder of this strange and difficult COVID time.
Despite retracting the email, the ACCC alleges ARM continued to work on a bid for the second tender.
CDU excluded ARM's bid for the second tender, citing Mr Allen's email.
CDU project back under a cloud
It's not the first time the university's $250 million new campus has drawn criticism and scrutiny.
In 2020 some of the NT's leading architects expressed concern about the building's design as well as details of the project being "drip-fed".
Among criticism made of the project by the NT branch of the Australian Institute of Architects was that one wall of the eight-storey complex could reflect heat into the heart of the city.
CDU released a final design for the campus in 2021, with CDU vice-chancellor Scott Bowman saying the building had "changed an awful lot".
Late last year the ACCC warned the public sector to be mindful of potential bid rigging for procurement processes.
Ms Cass-Gottleib said architecture firms were not immune from Australia's cartel laws.
"Firms competing in these markets must compete fairly and ensure they do not engage in anti-competitive behaviour, including cartel conduct," she said.
In a statement a spokesperson for ARM Architecture said: "As this matter is before the court, it is not appropriate for us to comment further at this time, other than to assure our clients and partners this matter will not affect the delivery of our projects".
