Date: 19.10.2026
By: Nicole Leong
INTRODUCTION
When several bidders use the same 3rd party agent or consultant, this arrangement raises a question under the Malaysia Competition Act 2010 (“Competition Act”): when does engaging a 3rd party agent or consultant in a tender process give rise to a risk of infringing the Competition Act?
Malaysia Competition Commission’s (“MyCC”) recent AADK food-supply tender infringement decision provides a useful perspective. Announced on 29 September 2026, MyCC imposed approximately RM1.18 million in total financial penalties on 6 enterprises. The case concerned a three-year food-supply tender for the AADK rehabilitation centre in Papar, Sabah, worth approximately RM5.7 million.
For businesses and in-house legal teams, the value of the decision goes beyond another warning about bid rigging. It raises questions about sharing common agents or consultants with competitors, control over bids and the consequences of admitting an infringement.
WHAT HAPPENED IN THE AADK FOOD-SUPPLY TENDER INFRINGEMENT DECISION BY MYCC
In an infringement decision dated 21 September 2026, MyCC found 6 enterprises liable for bid rigging under Section 4(1), read with Sections 4(2)(d) and 4(3), of the Competition Act. The case concerned a 3 year, RM5.7 million food-supply tender for AADK’s rehabilitation centre in Papar, Sabah under “Pembekalan Makanan Mentah, Basah and Kering kepada Pusat Pemulihan Penagihan Narkotik Papar, Agensi Antidadah Kebangsaan Malaysia, Negeri Sabah” (“AADK Tender”).
Throughout the investigation period, MyCC executed a search warrant at Zirbad Resources Sdn Bhd’s (“Zirbad”) premises, issued several notices requesting documents and recorded statements from key individuals. Its evidence included recorded statements, a centralised tender-pricing document, and consolidated email passwords and procurement-account details recovered from Zirbad’s premises. MyCC found that the 6 enterprises coordinated their tender preparation and pricing rather than competing independently.
All 6 enterprises admitted liability and accepted the total financial penalties of approximately RM1.18 million payable in 12 equal monthly instalments. MyCC also directed the 6 enterprises to implement competition-law compliance programmes twice yearly for two years, involving the proprietors or partners and employees handling tender preparation and submission.
KEY TAKEAWAYS
Key takeaway 1: A common tender agent or consultant must not become a channel for coordinating competing bids
In the infringement decision on AADK Tender, MyCC described how Zirbad’s director, Adham, provided financial, administrative and logistical assistance to the 6 enterprises in the AADK Tender. This included funding for certain bidders, arranging meetings and helping with tender documents. The bidders also used premises associated with Zirbad to prepare their submissions. The evidence found by MyCC went beyond shared support provided by Zirbad to the 6 enterprises. MyCC recorded that bidders discussed prices with Adham or adjusted their prices by reference to a centralised pricing template. Materials recovered at Zirbad’s premises included bidders’ email and e-procurement credentials and tender-pricing records. MyCC considered these materials together with recorded statements in finding that the bids were not prepared independently.
It should be noted that the Competition Act should not prohibit a business from obtaining legitimate support or outsourcing. However, care should be taken to ensure engaging a 3rd party agent or adviser in a tender process will not give rise to a risk of infringing Competition Act.
An agent or consultant may help explain tender requirements, organise documents or check whether a tender submission is complete, but the bidder ultimaely develops its price from its own costs and commercial assessment and its confidential information is not passed to competing bidders via the agent or consultant. On the other hand, if the 3rd party agent or consultant receives several bidders’ proposed prices and adjusts them together before submission, this may raise competition issues. The question is not just whether competing bidders share a common agent or consultant but also whether the arrangement preserves independent commercial decisions or substitutes coordination for competition among the bidders. Bear in mind that collusion between competitors can occur indirectly through another party, without a formal written agreement between competitors.
Key takeaway 2: A tender consultant or agent is not necessarily protected by staying off the bidder list
In the AADK infringement decision, MyCC repeatedly emphasized that its findings of infringement is limited to the 6 enterprises who participated in the AADK Tender. Zirbad, who did not submit a bid in the AADK Tender, was not a party to MyCC’s infringement decision.
Now, businesses should not be too quick to read that as a general exemption for tender agent, consultant or coordinators.
In the infringement decision of sections 4(1) and (2)(a) of the Competition Act by Containerchain (Malaysia) Sdn Bhd, Ayza Industries Sdn Bhd/Ayza Logistics Sdn Bhd, ICS Depot Services Sdn Bhd, E.A.E Depot & Freight Forwarding Sdn. Bhd. and Prompt Dynamics Sdn Bhd dated 1 June 2016, in addition to finding the competing depot operators engaging in prohibited price fixing under section 4(2)(a), MyCC also found that Containerchain as the IT service provider as an infringing party under section 4(1) of the Competition Act.
There is also a separate development concerning Zirbad. MyCC accepted an undertaking dated 26 September 2026 under Section 43 of the Competition Act from Zirbad. Notably, the undertaking was given pursuant to MyCC’s investigation on logistic tender and police dry food supply tender in Sabah. The said undertaking did not identify it as resolving Zirbad’s role in the AADK Tender. In the undertaking given by Zirbad in favour of MyCC, Zirbad undertakes that it shall, among others:
- refrain from engaging in any conduct that contravenes Section 4 of the Competition Act including any form of bid rigging in respect of any future procurement or tender process;
- refrain from communicating, directly or indirectly, with any actual or potential competitor for the purpose of discussing, coordinating or otherwise influencing any aspect of a procurement or tender process including but not limited to the preparation, submission or pricing of bids; and
- refrain from exchanging, disclosing or receiving any commercially sensitive information with any actual or potential competitor in connection with any procurement or tender process including information relating to prices, bid strategies, bid intentions, tender participation, costs, margins or any other information that may facilitate or give rise to bid rigging or any other anti-competitive conduct.
The distinction is important for tender agent, consultants and adviser providing tender support. Do not be too quick to assume that Competition Act is not relevant because their name do not appear on the tender submission.
For the bidder, outsourcing tender preparation should similarly prompt questions about what the consultant or agent does with its confidential information and whether the consultant or agent serves competing participants in the same tender.
Key takeaway 3: Paying financial penalty to MyCC may not be the only commercial consequence for infringing Competition Act 2010
In the infringement decision dated published by MyCC, all 6 enterprises admitted liability and accepted the proposed financial penalties totalling RM1.18 million to be paid by way of 12 monthly instalments.
It should be noted that the resulting outcome remained an infringement decision by MyCC.
Under the Circular 1.8 issued by the Ministry of Finance and Circular on Integrity in Public Procurement (PK 1.6), enterprises found to have engaged in bid rigging conduct in public procurement may be issued a warning, suspended from registration or their registration may be cancelled by the Ministry of Finance for a maximum period of five years. They will be prohibited from participating in other procurements by government agencies during the period. Directors of said enterprises will also be blacklisted. They will not be allowed to register any new companies with the Ministry of Finance for that duration.
Under sections 19 and 21 of the Government Procurement Act 2016 (which is set to come into force in 2027 – see our previous article on this at https://www.wenlaw.co/malaysias-government-procurement-act-what-businesses-need-to-know/), an application for registration must be refused, or an existing registration may be suspended, where the applicant or registered person is named in a finding of infringement determined by MyCC under the Competition Act 2010.
Hence, for businesses dependent on government contracts, the assessment should go beyond whether it can afford the financial penalty. Its MOF registration, eligibility for future awards and obligations under existing contracts may require separate review.
WHAT BUSINESSES SHOULD DO BEFORE THE NEXT TENDER
- Keep commercial decisions genuinely independent. Staff should be trained to understand when conversations about participation, prices, customers or intended bids must be stopped and escalated and document the tender process clearly.
- Define third-party roles and access. Do not leave it unclear whether someone is an agent, adviser, consortium partner or commercial decision-maker. Review access permissions to confidential information through the approved procurement processes.
- Establish a lawful response process. Where concerns arise, preserve relevant records and obtain legal advice from competition law lawyer on the facts. Do not delete messages, rewrite historical documents or create retrospective explanations. It is an offence under the Competition Act to provide false information to MyCC, obstruct MyCC’s investigation and delete evidence.
CONCLUDING REMARKS
Outsourcing certain tender process can make participation possible for businesses that lack particular resources. However, it may give rise to the risk of infringing Competition Act.
The MyCC’s recent infringement decision in AADK Tender serves as a reminder to businesses to examine who really controls their bids, how information moves and what their agents or consultants are authorised to do. For businesses using shared tender agent or consultant, care should be taken to ensure no confidential information is exchanged and ensure that the tender remains genuinely competitive.
Wen & Co. welcomes enquiries about tender arrangements, competition compliance and responses to MyCC. Please reach out at general@wenlaw.co with any questions.
This update is for general information only and does not constitute legal advice.