Lessons to learn from the Office of Fair Trading (“OFT”) announcement to impose fines totalling £129.5m on more than 100 construction firms. The decision followed one of the OFT’s largest investigations.
The OFT concluded that the firms had engaged in anti competitive bid-rigging (most commonly in the form of cover pricing) on 199 tenders between 2000 and 2006.
The OFT stated that cover pricing (where bidders in a tender process obtain artificially high prices from their competitors who submit bids which are not priced to try to win the contract) is endemic within the construction industry.
Firms that have not been punished should be very aware of the competition rules. It seems that the OFT is of the view that there are firms engaged in anti-competitive behaviour, which remain unpunished.
The OFT investigations are likely to continue and businesses within the construction plant industry are not excluded from its remit. Going forward, bidders for contracts will need to be confident that their bids can be shown to be genuine attempts to win contracts, based on reasonable quotations.