CIOB to monitor guilty cover pricing firms

The 103 firms fined last month by the OFT for anti-competitive practices included 10 CBCs: Allenbuild, Bullock Construction, Mansell, Bramhall Construction, Geo Houlton & Sons, Interclass, Kier Group companies Kier Eastern and Kier London, R Durtnell & Sons, Speller-Metcalfe, and Willmott Dixon Group.

Responding to the news, CBC manager Jess Deacon said: ‘The CBC Board is monitoring these events closely. It will normally institute disciplinary proceedings against any CBC when there is prima facie evidence that it has failed to follow the code of professional conduct, and/or is in breach of these rules.’

Of the 10 CBCs named, Durtnell was fined £711,115, Interclass was fined £464,406, Geo Houlton was hit with a £265,492 fine, and Speller-Metcalfe £389,758.

The OFT investigated 199 infringements, ranging from tenders where only a minority of bidders engaged in cover pricing, to 11 cases where every bid received by the client was affected by cover pricing and only one bidder actually wanted to win.

The tenders examined dated from March 2000 to June 2006.

One major contract affected was the tender for the Digital Media Centre in Barnsley (pictured left), won by Morgan Ashurst in February 2006 for £7,988,000. Morgan Ashurst had given a cover price to Willmott Dixon, and there was only one other bidder. Three other invited bidders did not submit a tender.

The contract for the Digital Media Centre was one of three identified cases where Morgan Ashurst engaged in cover pricing between 2004 and 2006. The company received a total fine of £286,593, which takes into account a reduction granted by the OFT for co-operating with the investigation.

In a statement the company said: ‘Since the OFT’s investigation was launched, the company has carried out a comprehensive review of the group’s approach and has strengthened policies and procedures in this area, which it will keep under regular review.’

Regional development agency Yorkshire Forward, which co-funded the Barnsley scheme, said in a statement: ‘[The OFT investigation] is something we are extremely concerned about and whilst we already have provisions within our procedures to deter this practice we will now be looking into both the implications of the findings and further ways in which this can be discouraged going forward.’