Construction firms fined £129.5m for fixing bids
The Office of Fair Trading has fined 103 construction companies £129.5 million after finding them guilty of colluding over building contracts.
It found that from 2000 to 2006, the firms rigged bids on 199 tenders. This illegal activity usually took the form of ‘cover pricing’, where bidders force an artificially high price on clients.
The infringements involved private projects such as blocks of flats and housing refurbishments, as well as schools, universities and hospitals.
The OFT said in 11 tendering rounds, all bids but one were cover bids. The lowest bidders therefore faced no competition, which the regulator said led to ‘an even greater risk’ that the client paid a higher price than necessary.
Simon Williams, OFT senior director, said: ‘Bidding processes designed to ensure clients and in many cases taxpayers receive the best possible choice and price were distorted, creating a real risk of increased prices.
‘This decision sends a strong message that anti-competitive and illegal practices, including cover pricing, must cease.’
One of the firms involved was house builder Galliford Try, which has been fined £8.33 million for three incidents of cover pricing between 2001 and 2004.
This morning, the firm released a statement, which said: ‘Galliford Try deeply regrets any actions in the business at that time that have been found to breach the Competition Act 1998 and confirms that Galliford Try has not and does not condone any anti-competitive practices.
‘It is now over five years since the last incidence occurred and Galliford Try has in place a comprehensive competition law compliance policy and procedures to ensure it does not engage in anti-competitive activities, including cover pricing.’