The Office of Fair Trading (OFT) has handed down fines totalling £129.5 million to 103 construction firms for rigging bids on projects across England.
Major players including Balfour Beatty and Carillion are among the companies listed as having colluded with competing firms on building contracts.
Investigations by OFT uncovered bid-rigging activities in projects – including hospitals, schools and apartment blocks – worth more than £200 million.
The competition watchdog said it had found 199 tenders dating from 2000 to 2006 where bid-rigging took place.
This was mostly in the form of so-called cover pricing, where one or more bidders arranges for competitors to put down high bids so as not to win the contract but to increase the appearance of competition.
“This distorts the tender process and makes it less likely that other potentially cheaper firms are invited to tender,” the OFT said.
It added that in 11 instances the lowest bidder faced no genuine competition at all as all other companies involved in the tender had put down cover bids.
The OFT warned that today’s revelation could be just the start of things, with the practice of cover pricing described as “widespread and endemic” in the construction industry.
It uncovered evidence of cover pricing in over 4,000 tenders involving more than 1,000 companies but said it had to focus on the companies and instances where evidence was strongest.
In six instances, the OFT found that money had changed hands between the firms, with the successful bidder paying “compensation” up to £60,000 to its unsuccessful rivals by raising false invoices.
The UK Construction Group (UKCG), which represents 29 contractors, called the decision to penalise the firms “unfair”.
UKCG director Stephen Ratcliffe said: “It is perverse and unfair to impose such disproportionate penalties on a small number of contractors selected by geographical sampling.”
