Yung Cheng Ltd. alleged to have borrowed bidding qualification documents from others when participating in bidding for a prosthetic kidney procurement contract of Provincial Chiayi Hospital, in violation of the Fair Trade Law
Case:
Yung Cheng Ltd. alleged to have borrowed bidding qualification documents from others when participating in bidding for a prosthetic kidney procurement contract of Provincial Chiayi Hospital, in violation of the Fair Trade Law
Key Words:
create the illusion of competitive bidding, prosthetic kidneys, deceptive acts
Reference:
Fair Trade Commission Decision of June 7, 2001 (the 500th Commissioners' Meeting); Disposition (90) Kung Ch'u Tzu No. 076
Industry:
Medical Devices and Equipment Manufacturing (3030)
Relevant Law:
Article 24 of the Fair Trade Law
Summary:
1. The facts of this case as recited in the criminal judgment of the Chiayi District Court of Taiwan are summarized as follows: Hu Min-ch'eng and Sun Fu-chu were staff members of the general affairs office of Provincial Chiayi Hospital and in charge of handling procurement work. As far as their duties are concerned, both were civil servants under the law. At the same time, Wu Ch'ang-an is the responsible person of Yung Cheng Ltd. In October 1994, Provincial Chiayi Hospital held a public tender for procurement of prosthetic kidneys. Yung Cheng Ltd. was awarded the bid to provide NIPRO brand prosthetic kidneys. When the agreement expired in August 1996, to avoid the inconvenience of public tender procedures, the hospital changed its procurement practice to decentralized procurement on a price comparison basis. Hu Min-ch'eng and his job successor Sun Fu-chu, acting jointly with Wu Ch'ang-an and out of general criminal intent to make, as civil servants, misrepresentations on official documents on a continuous basis in successive procurements. Hu and Sun were aware that they had obtained price quotations only from Yung Cheng Ltd., and that the other two "competitor" companies whose names they had recited on procurement documents - Jui Feng Co. and Ch'uan Wei Co. - had not actually participated in price competition, and that the price quotations submitted in their names had actually been submitted by Wu Ch'ang-an. Yet they proceeded to make false representations such as "names of three companies submitting price quotations" and "the supplier offering the lowest price" on the medical devices procurement requisition forms that they were in charge of managing for their jobs. These misrepresentations were sufficient to impair the correct handling of medical device procurement by Provincial Chiayi Hospital. The Chiayi Office of the Ministry of Justice Investigation Bureau therefore made a written request to the Fair Trade Commission (FTC) to handle the case. 2. Findings by the FTC are as follows: When participating in price bidding for NIPRO brand prosthetic kidneys held by Provincial Chiayi Hospital from October 1996 through June 1997, Wu Ch'ang-an, the responsible person of Yung Cheng Ltd., consistently fabricated price quotations in the names of Ch'uan Wei Co. and Jui Feng Co. so that price quotations could be submitted in the names of three companies separately for a single bidding. Each time, Yung Cheng Ltd. was awarded the bid and supplied the prosthetic kidneys. Jui Feng Co. asserted that it had never participated in price bidding for prosthetic kidneys for Chiayi Hospital, and corroborated that Yung Cheng Ltd. had asked Jui Feng Co.'s responsible person Chang Sheng-hsiung to affix Jui Feng Co.'s company chop on an entire pad of blank price quotation forms, which Yung Cheng Ltd. then filled out. These facts are substantiated by the statements taken from Wu Ch'an-an and Chang Sheng-hsiung by the Ministry of Justice Investigation Bureau, as well as by the photocopies of the medical device s procurement requisition forms of Chiayi Hospital and the supplier tender price quotation forms. The evidence clearly corroborates the facts of the document lending. 3. Yung Cheng Ltd. used borrowed documents to create the illusion that three enterprises were participating in competitive bidding, thereby depriving other enterprises of the chance to participate in fair competition for trading opportunities, impairing business ethics and obstructing the normal operation of market price mechanisms. These acts constituted deceptive acts sufficient to affect trading order in violation of Article 24 of the Fair Trade Law. However, because the acts transpired before the partial amendment to the Fair Trade Law took effect on 5 February 1999, the FTC ordered Yung Cheng Ltd. to immediately cease the said deceptive acts pursuant to the fore part of Article 41 of the Fair Trade Law in effect at the time of the acts. Appendix: Yung Cheng Ltd.'s Uniform Invoice Number: 66627861 Summarized by Lin, Hsiao-Hung; Supervised by Lin, Gin-Lan