The Office of Fair Trading (OFT) has accused 112 construction companies of rigging bids for contracts.
The Office of Fair Trading (OFT) has accused 112 construction companies of rigging bids for contracts.
It said the firms colluded among themselves while bidding for contracts, leading to customers, such as local authorities, having to pay too much.
It said the firms colluded among themselves while bidding for contracts, leading to customers, such as local authorities, having to pay too much.
The OFT added that in a few cases firms entered into agreements whereby the successful tenderer would pay an agreed sum of money to those that lost out.
The regulator added that in a few cases firms entered into agreements whereby the successful tenderer would pay a sum of money to those that lost out.
It said the cartel practice involved the use of false invoices.
It said the cartel practice involved the use of false invoices.
The OFT said that of the 112 firms accused, 40 had already admitted price fixing, while a further 37 had applied for leniency.
The OFT said that of the 112 firms accused, 40 had already admitted price fixing, while a further 37 had applied for leniency.
Construction giants Balfour Beatty and Carillion are among those the OFT accuses of taking part.
Construction giants Balfour Beatty and Carillion are among those the OFT accuses of taking part.
'Strong message'
'Strong message'
The OFT said the tactic at the centre of the bid rigging was "cover pricing", whereby one or two bidders would collude with another to deliberately offer the customer a price that was too high to win the contract.
The regulator said the tactic at the centre of the bid rigging was "cover pricing", whereby one or two bidders would collude with another to deliberately offer the customer a price that was too high to win the contract.
Businesses have no excuse for not knowing and abiding by the law John Fingleton, OFT chief executive
Businesses have no excuse for not knowing and abiding by the law John Fingleton, OFT chief executive
The OFT added that "a minority" of firms made arrangements whereby the winner of the bid would make a payment to those companies that deliberately lost out.
The OFT added that "a minority" of firms made arrangements whereby the winner of the bid would make a payment to those companies that deliberately lost out.
"Cartel activity of the type alleged today harms the economy by distorting competition and keeping prices artificially high," said OFT chief executive John Fingleton.
"Cartel activity of the type alleged today harms the economy by distorting competition and keeping prices artificially high," said OFT chief executive John Fingleton.
"This investigation, together with the OFT's previous decisions in the roofing sector, will hopefully send out a strong message to the construction industry about the seriousness with which we view suspected anti-competitive behaviour.
"This investigation, together with the OFT's previous decisions in the roofing sector, will hopefully send out a strong message to the construction industry about the seriousness with which we view suspected anti-competitive behaviour.
"Businesses have no excuse for not knowing and abiding by the law."
"Businesses have no excuse for not knowing and abiding by the law."
The OFT said its investigations first started in 2004 following an initial complaint in the East Midlands.
The OFT said its investigations first started in 2004 following an initial complaint in the East Midlands.
Time to respond
Time to respond
Balfour Beatty confirmed that it had applied for leniency.
Balfour Beatty confirmed that it had applied for leniency.
It said in a statement that it had now reviewed its practices and was "confident that all of its subsidiaries are now fully compliant".
It said in a statement that it had now reviewed its practices and was "confident that all of its subsidiaries are now fully compliant".
"Balfour Beatty neither promotes nor condones anti-competitive behaviour," it said.
"Balfour Beatty neither promotes nor condones anti-competitive behaviour," it said.
An OFT spokesman said its accusations, issued in a Statement of Objections, will now go to the companies concerned.
An OFT spokesman said its accusations, issued in a Statement of Objections, will now go to the companies concerned.
They will then have a number of months in which to respond.
They will then have a number of months in which to respond.
Any firm found to be a member of a cartel can be fined up to 10% of its annual turnover, but penalties are reduced for those who co-operate with an investigation.
Any firm found to be a member of a cartel can be fined up to 10% of its annual turnover, but penalties are reduced for those who co-operate with an investigation.
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Do you work in the construction industry? Have you had any dealings with the building trade? Send us your comments using the form below.
