Industry to debate cartel case with OFT

Balfour Beatty, Connaught, Interserve and Renew announced this week that they had been contacted.

The disclosures follow similar announcements by Kier, Galliford Try and ROK, which are among 150 firms believed to be under investigation.

Building has learned that the confederation has written to the OFT and is seeking a meeting, in which it will speak on behalf of the industry.

It is understood that the organisation will claim that while “cover pricing” may have occurred in the industry in the recent past, it has now been largely eliminated by legislation and the move to more detailed bid submissions.

In addition it is understood that the confederation may ask the OFT to consider reducing any fines against companies

Cover pricing is where a contractor bids for a project it does not want in order to remain on a client’s future tender lists. It is collusive because the contractor will phone a genuine bidder to obtain its price, which it then bids substantially above.

A source at one of the companies under investigation said the confederation also wanted to discuss whether the technicalities of competition law conflicted with the partnering and framework agreements that have been encouraged by the government as best practice.

In addition it is understood that the confederation may ask the OFT to consider reducing any fines against construction firms, arguing that the principle of imposing fines according to turnover is unfair in a sector where the ratio of profit to turnover is smaller than in other industries.