Construction firms accused of rigging bids

Source: Stock Market Digital

Date :17/04/2008 09:16:53

112 UK construction companies have been accused of rigging bids for contracts, the Office of Fair Trading (OFT) has said.

Following one of the largest-ever Competition Act investigations, which started in 2004, the OFT has accused 112 firms of over 240 alleged infringements covering a diverse range of projects, including tenders for schools, universities and hospitals.

Bidding

The OFT said the tactic at the centre of the bid rigging was "cover pricing", whereby one or two bidders would collude with another to deliberately offer the customer a price that was too high to win the contract.

It added that in a few cases firms had entered into agreement whereby the successful tenderer would pay an agreed sum of money to those that lost out.

The OFT said the cartel practice involved the use of false invoices.

Anti-competitive

OFT chief executive John Fingleton said the investigation would hopefully send out a “strong message” to the construction industry about the seriousness of anti-competitive behavior.

"Businesses have no excuse for not knowing and abiding by the law," he said.

Leniency

The OFT said the companies named would now have the opportunity to make written and oral representations before it makes a final decision as to whether competition law has been infringed and as to the appropriate amount of any penalties it may decide to impose on each of the firms.

The OFT said that of the 112 firms accused, 40 had already admitted price fixing, while a further 37 had applied for leniency, including construction giant Balfour Beatty.

In a statement, the construction firm said it had now reviewed its practices and was "confident that all of its subsidiaries are now fully compliant".

"Balfour Beatty neither promotes nor condones anti-competitive behaviour," it said.

April 17, 2008