Balfour Beatty granted leniency measures in OFT case

Balfour Beatty has become the first firm under investigation by the OFT to confirm it has been granted leniency measures which would reduce any fines levied against it.

As one of the largest firms under investigation, with a turnover of £7.5bn, Balfour Beatty stood to be hit particularly hard by any fines based as a percentage of turnover.

However, a spokesperson for the firm said this morning that: “Subject to ongoing co-operation, the OFT has granted leniency to Balfour Beatty, thus reducing any fines which might ultimately be levied on Balfour Beatty or any of its operating businesses.” The spokesperson added that the company would respond to the OFT in respect of its statement of objections in due course.

Willmott Dixon, one of the largest private firms to have been mentioned In the inquiry, said it was “disappointed” to have been named. A spokesperson said: “The company has high ethical standards and allegations of this kind run contrary to our ethos, culture and values.” 

The company added that allegations against it concerned six unsuccessful tenders with a combined value of under £30 million.  The spokesperson said there was no suggestion that any benefit accrued to the company in relation to any of these unsuccessful tenders.

The Construction Confederation chief executive Stephen Ratcliffe called on the OFT to deal with firms fairly, and take steps to prevent public sector clients from blacklisting firms from future tender lists.

Ratcliffe said: ““In recent years, the industry has gone to great lengths to stamp out the practice [of cover pricing]. For example, companies are already ensuring that employees understand requirements for compliance and have written to all staff establishing protocols.”

“We are concerned that, because the OFT fines system is based on turnovers, there is a risk that fines will be disproportionate in an industry which has high turnovers and relatively small profit margins.

“We would like to see guidance drawn up by the OGC and the Department of Communities ansd Local Government (DCLG) so that public sector clients have the security of clear guidelines that contractors should not be omitted from tender lists because of these past infringements.

“It would also be helpful if the OFT could make it clear that contractors should not be dropped from tender lists as a result of their investigation.”