112 Construction companies accused April 17th, 2008

112 construction companies have been accused by The Office of Fair Trading (OFT) of acting as a cartel and fixing bids for contracts. The winning bidder would then give a ‘back hander’ to losing bidders which would effectively be paid by the customer through having to pay an inflated price for the works.

The OFT chief executive John Fingleton said “Cartel activity of the type alleged today harms the economy by distorting competition and keeping prices artificially high. 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.”

40 firms have already admitted to price fixing and 37 have asked for leniency. Among the big players, Carillion and Balfour Beatty are the names in the frame, although their exact involvement (if any) will only be known in a few months when the companies have had time to respond.