OFT uncovers £3bn of rigged construction bids

After a two-year investigation into cartels by The Office of Fair Trading has uncovered £3bn of bid rigging in the construction industry.

The OFT raided a total of 57 offices during the investigation, and 37 of those applied for leniency .

It has informed those that have not applied for leniency that it is too late to do so, but has appealed to companies involved in bid rigging beyond the scope of the current investigation to do so in exchange for a reduced financial penalty.

Punishment for firms found guilty could be as much as 10% of turnover.

The existing investigation covered England but was mainly focused on the East Midlands, Yorkshire and Humberside. It dealt with all activities up to 31 December 2006.

A statement from the OFT said: “The investigation has uncovered evidence of bid rigging activities which include cover pricing, where companies obtain a price from a competitor in the tender process which is not designed to win the contract but is intended to give the appearance of competition.

“In some instances the OFT has also found evidence in the current investigation of compensation payments or 'bungs' being passed between competitors in exchange for a cover price.

It added that for the first time it had used digital evidence and forensic IT, “in order to discover electronic documents held on computers, as well as forensic analysis of documents where attempts may have been made to hide evidence. The OFT has also carried out interviews with ex-employees of implicated parties.”