Court fines ARM Architecture for cartel conduct

The Federal Court of Australia has ruled that ARM Architecture and its former managing director Anthony ("Tony") John Allen attempted to rig bids in a tender for Charles Darwin University's $250 million education and community precinct project.

The court ordered the practice to pay a $900,000 penalty to the Commonwealth and contribute a further $20,000 to the Australian Competition and Consumer Commission (ACCC) to offset the civil proceedings' cost. Allen was ordered to pay a $75,000 penalty to the Commonwealth and contribute a further $5,000 to the ACCC, again to offset the proceedings' cost.

ARM was also ordered to establish a Competition Compliance program. Its requirements include employing a compliance advisor, appointing a compliance officer within its directors or senior managers, and undertaking regular staff training.

Additionally, Allen was ordered to publish "an educative notice" on the Architects Registration Board of Victoria website "as a warning to other professionals."

ARM Architecture had completed a first-phase concept design, which was unveiled in June 2020, for a Charles Darwin University project.

"I had known, since ARM tendered for that work, that there would be a separate tender process for the second phase of that project," Allen wrote in his educative notice.

On 24 September 2020, Charles Darwin University released the second request for tender.

Allen then sent an email to representatives at eight other firms, saying, "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."

The eight practices were part of the Ambassador group of the Victorian Large Practice Forum, which is facilitated by the Australian Institute of Architects. The group comprises the largest firms in the Large Practice Forum.

On 25 September 2020, ARM received responses from two practices, each confirming that it would not submit a tender. Four days later, Allen sent a second email to the group asking the remaining practices to "let us know of your intentions."

The ACCC launched an investigation into the conduct of ARM and Allen, and in September 2022, it formally launched civil proceedings in the Federal Court of Australia.

ARM Architecture admitted to the Federal Court that it had attempted to engage in cartel conduct when those emails were sent. Allen also admitted that he had attempted to induce the eight other firms to make an arrangement with ARM Architecture that, although it had not been his intention, constituted bid rigging.

Allen said in his educative notice that he had never set out to contravene the law. "It did not occur to me when I sent the first and second emails that I was doing anything wrong," he wrote.

"I made a very serious mistake by attempting to induce the other firms to engage in bid-rigging, and this has had serious consequences for me."

"I have lost my position, my reputation, and my involvement in a profession that I love, my conduct will be permanently on the public record."

"I have not worked as an architect since, and do not expect that I will ever do so again."

"Do not do what I did. Learn from my mistakes. Whatever pressure you may be under, and whatever motivation you may have, do not attempt to induce others to engage in cartel conduct."

ACCC chair Gina Cass-Gottlieb said, "This judgment should serve as a strong reminder for everyone, including professionals and professional services firms, that bid rigging is against the law, no matter what industry you are in.

"When a business attempts to rig a bid or form a cartel, they harm competition by unfairly seeking to advance their interests over those of its customers. When they do so on a public project, they are also doing so at the expense of the public purse."