Construction firms accused of bid rigging
CONSUMER watchdog the Office of Fair Trading (OFT) yesterday dealt out fines adding up to £129.5m to some of the UK’s biggest building companies, punishing them for colluding while bidding for work on projects such as hospitals, schools and housing refurbishments.
Balfour Beatty, Carillion, Connaught, Interserve, Kier and Galliford Try were among the 112 named and shamed by the OFT yesterday, in the latest blow to the recession-hit construction industry.
The OFT said the investigation – which took more than four years – found practises of so-called cover pricing, where construction firms secretly agree the prices they will submit during a bidding process.
About 80 of the firms, many of which are publicly listed, have admitted that they took part in some kind of bid-rigging, or said that they have applied for leniency in return for assisting the OFT.
Just under 200 tenders had been distorted between 2000 and 2006 by cover pricing, the OFT said, on public sector contracts worth billions.
The illegal activity was mostly in the form of cover pricing where bidders got rivals to submit artificially high prices. Such bids were not priced to win a contract and gave a misleading impression about the extent of competition, the OFTsaid.
In some cases, the unsuccessful bidder was paid an agreed sum of money by the winner, it added.
“This decision sends a strong message that anti-competitive and illegal practices, including cover pricing, must cease,” a spokesman said.
AFAST FACTS OF TFINES
&9679; The four year investigation, which involved 57 company raids was one of the OFT’s biggest.
&9679; 199 contract bids were distorted by some form of bid rigging. The companies now face massive fines.