OFT accuses firms of bid-rigging

Balfour Beatty, Carillion and Kier are among the 112 companies formally accused of bid-rigging activities by the Office of Fair Trading.

The OFT has released its Statement of Objections to the London Stock Exchange. It names 112 companies it believes have engaged in bid-rigging activities, the bulk of them cover-pricing.

This is a practice whereby a company submits a high price that will not win a contract, following discussions with rival bidders, in order to keep in with a client.

The OFT says the work involved covers housing, commercial and industrial construction in the private and public sector.

This includes tenders for schools, universities and hospitals.

But it also alleges that a minority of the construction companies made compensation payments to other companies for cover-pricing.

The companies concerned now have 10 weeks to defend themselves against allegations before the OFT decides whether or not competition law has been broken.

If companies cannot defend themselves against the allegations, they may be fined up to 10% of their annual turnover.

The OFT’s Deborah Jones said that the maximum fines were unlikely to be imposed, but said the penalties were likely to be large because of the size of many of the companies involved.

Jones said anti-competitive practices were resulting in an increase in prices of around 10%.

She said the OFT has been told that the practice is endemic in construction.