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| Version 5 | Version 6 |
|---|---|
| Building firms 'rigged contracts' | Building firms 'rigged contracts' |
| (about 2 hours later) | |
| 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 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. | 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 40 firms had admitted price fixing, and 37 had asked for leniency. | It said 40 firms had admitted price fixing, and 37 had asked for leniency. |
| Businesses have no excuse for not knowing and abiding by the law John Fingleton, OFT chief executive See the full OFT release with names of all 112 companies | |
| The cartel practice involved the use of false invoices. | The cartel practice involved the use of false invoices. |
| 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. |
| 'Cancer' | |
| 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. | 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. |
| 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. |
| Office of Fair Trading explains how the 'rigging' worked | |
| "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 regarding building contracts at building contracts at Nottingham's Queens Medical Centre. | The OFT said its investigations first started in 2004 following an initial complaint regarding building contracts at building contracts at Nottingham's Queens Medical Centre. |
| Former quantity surveyor Bryan Rylands told the BBC that he left the industry because he was so disillusioned by the scale of the problem of price-fixing. | |
| "It continues from the self-employed builder right through to your major construction companies that are doing work here in the UK and overseas," he said. | |
| "It's extensive, I mean it is a cancer, it's not benign, it is rife." | |
| 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. |
| Do you work in the construction industry? Have you had any dealings with the building trade? Send us your comments using the form below. | Do you work in the construction industry? Have you had any dealings with the building trade? Send us your comments using the form below. |