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UK fines construction firms for fixing bids
Tuesday, 22 September 2009 12:33
Britain's consumer watchdog has handed out fines totalling £129.5m sterling to 103 construction firms it found had colluded with competitors on bidding for building contracts.
The Office of Fair Trading said it had concluded the firms 'engaged in illegal anti-competitive bid-rigging activities' on 199 tenders from 2000 to 2006, mostly in the form of 'cover pricing'.
Cover pricing is where bidders in a tender process obtain an artificially high price from competitors. Such bids are not priced to win the contract and give a misleading impression to clients as to the real extent of competition.
Irish firm John Sisk & Son was among those sanctioned and fined £6.2m sterling.
The OFT said one of its biggest investigations under Britain's Competition Act had uncovered pricing that distorted the tender process and made it less likely other potentially cheaper firms were invited to tender for contracts.
'This decision sends a strong message that anti-competitive and illegal practices, including cover pricing, must cease,' said Simon Williams, the OFT's senior director for the case.
Listed construction companies fined by the OFT include Balfour Beatty, Carillion, Connaught, Henry Boot, Interserve, Kier, Rok and Galliford Try. The larger fines handed down include almost £18m for Kier and £11.6m for Interserve.
Balfour Beatty, whose Mansell unit was fined £5.2m, said Mansell's breaches took place before its acquisition by Balfour.
Tuesday, 22 September 2009 12:33
Britain's consumer watchdog has handed out fines totalling £129.5m sterling to 103 construction firms it found had colluded with competitors on bidding for building contracts.
The Office of Fair Trading said it had concluded the firms 'engaged in illegal anti-competitive bid-rigging activities' on 199 tenders from 2000 to 2006, mostly in the form of 'cover pricing'.
Cover pricing is where bidders in a tender process obtain an artificially high price from competitors. Such bids are not priced to win the contract and give a misleading impression to clients as to the real extent of competition.
Irish firm John Sisk & Son was among those sanctioned and fined £6.2m sterling.
The OFT said one of its biggest investigations under Britain's Competition Act had uncovered pricing that distorted the tender process and made it less likely other potentially cheaper firms were invited to tender for contracts.
'This decision sends a strong message that anti-competitive and illegal practices, including cover pricing, must cease,' said Simon Williams, the OFT's senior director for the case.
Listed construction companies fined by the OFT include Balfour Beatty, Carillion, Connaught, Henry Boot, Interserve, Kier, Rok and Galliford Try. The larger fines handed down include almost £18m for Kier and £11.6m for Interserve.
Balfour Beatty, whose Mansell unit was fined £5.2m, said Mansell's breaches took place before its acquisition by Balfour.