Balfour Beatty, Carillion and Kier are among those facing huge fines if found guilty
Balfour Beatty, Carillion and Kier are among the 112 companies formally accused of bid-rigging activities by the Office of Fair Trading this morning.
The OFT released its Statement of Objections to the London Stock Exchange at 7am this morning. It names 112 companies it believes have engaged in bid-rigging activities, the bulk of them cover-pricing. This is a practice whereby a company submits a high price which will not win work, after discussions with rival bidders, in order to keep in with a client.
The OFT says the work involved includes housing, commercial and industrial construction in the private and public sector, including tenders for schools, universities and hospitals.
But it also alleges that a "minority" of the construction companies made compensation payments to other companies for cover-pricing.
The companies concerned now have 10 weeks to defend themselves against allegations before the OFT decides whether or not competition law has been broken.
If firms cannot defend themselves against the allegations they may be fined up to 10% of their annual turnover.
The OFT’s Deborah Jones said that the maximum fines were unlikely to be imposed, but said the penalties were likely to be large because of the size of many of the companies involved.
Jones said anti-competitive practices were resulting in an increase in prices of around 10%. She said the OFT has been told that the practice was endemic in construction.
Share prices are relatively unchanged this morning. Analysts said that the market was expecting the outcome so the impact on share prices of today's news was unlikely to be huge.