Industry reels following OFT list publication

Contractors and clients have been left in confusion and fear after the Office of Fair Trading (OFT) published a list of 112 firms it suspects of bid-rigging and cover pricing activities.

Construction News reported on Balfour Beatty's naming as one of nine contractors accused of the more serious crime of making 'compensation payments' - tenders where money changed hands between rival firms in order to rig the results of bidding for construction projects. The allegations relate to bids involving the firm's Mansell subsidiary, which it bought in 2003. Balfour and the other 111 accused companies now have until June 30 to respond to the Statement of Objections sent to them.

Building magazine focused on the reaction from public sector clients, among them the NHS and Highways Agency (HA), who are now scrutinising procurement in order to root out corruption.

A spokesman for the HA said it would launch: 'a thorough review of its controls and procedures across its business to ensure these practices do not take place.' While NHS chief David Nicholson has written an internal memo to financial directors in the public health sector, warning them to report all suspicions of price fixing.

Meanwhile, the Construction Confederation has written to every local authority to ask that companies named by the OFT would not be removed from frameworks.

Contract Journal warned that the OFT list could delay projects as clients shy away from awarding work to the named firms. The £4.5bn M25 widening contact could be affected, as both Balfour Beatty and Carillion - part of two separate consortia shortlisted to take the M25 job - are accused.