Contractors lobby for ‘reasonable’ penalties as watchdog holds back details of fines for up to six months

Contractors under investigation for bid-ridding by the Office of Fair Trading will have to wait for up to six months longer than expected to learn whether they will been fined.

It is understood that the OFT has privately told senior industry figures that it will not announce how much individual firms will be fined or the final accusations against them until the middle of next year, rather than January as originally expected.

Of the 112 firms accused, those found guilty of anti-competitive behaviour could be fined 10% of their turnover, although those that co-operated early with the inquiry could receive leniency.

The delay means fines are likely to be announced in the middle of what is predicted to be the toughest year of the downturn. However, if firms appeal the verdict, they will be able to put off paying the bulk of any fine.

It is understood that the delay is because of the large number of cases involved and volume of responses to the accusations the OFT made in April. Most firms are accused of cover pricing, although 10, including Balfour Beatty subsidiary Mansell and Bowmer & Kirkland, are understood to be accused of more serious forms of bid-rigging, involving the exchange of money.

I’d expect it to be later rather than sooner, because of the volume of firms involved.

OFT spokesperson

An OFT spokesperson would not confirm the date the findings would be released, but said: “I’d expect it to be later rather than sooner, because of the sheer number of firms involved.”

One contractor under investigation said: “From a financial point of view, companies want to find out what they’re going to be fined sooner rather than later as they’re making plans for the financial year now.”

Stephen Ratcliffe, chief executive of the UK Contractors Group, to be launched in January, said that the group would push for fines to be reasonable and for the OFT to help safeguard the future workloads of firms found guilty of anti-competitive behaviour.

There is increasing concern over how public sector clients will react to the findings. A report by the Organisation for Economic Co-operation and Development, published this month, indicated that 76% of procurers would exclude a firm found guilty of bid-rigging from future tenders – 58% for more than 5 years.