Major repercussions for bid rigging probe

Contractors caught up in the industry's biggest ever bid rigging probe could incur fines running into "hundreds of millions" reported Contracts Journal (CJ).

Speaking at a CIOB-organised seminar in London this week, legal experts from Berwin Leighton Paisner warned that Office of Fair Trading (OFT) investigators expect massive fines to be levied against contractors when verdicts are delivered in 2009, CJ said.

The OFT investigation has focused on identifying cases of cover bidding, in which firms submit a price that's not intended to win a contract, giving the impression of competition in the market. The probe has been running for three years and has involved dawn raids on 57 construction companies.

CJ quoted OFT cartels group deputy director Deborah Jones as saying that 38 firms have already confessed to bid rigging in an attempt to get their fines reduced. New 'fast track' rules indicate a 25% reduction in future fines.

Building magazine reported Jones as saying that the OFT may launch criminal proceedings against directors if the industry fails to co-operate with its cartels investigation. So far it has used only civil powers, said Building, but is now considering criminal investigations that carry up to five years imprisonment and director disqualification for "dishonest" individuals.

Construction News (CN) spoke to the CIOB's Chris Blythe, who warned that the current investigation, into 3,000 suspect contracts worth £3Bn, is likely to spread into other parts of the UK.

"They've not touched civils. They've not touched Wales or Scotland," CN quoted Blythe as saying. "There is a lot more corruption out there for them to investigate if they want to...This could have a big effect on the industry. It's certainly a bigger issue than corporate manslaughter. It is going to be a long cold shower for the construction industry."