Investigation into bid rigging is labelled “incompetent” as OFT is accused of gung ho approach

A source close to the investigation said: “Companies have been accused of rigging specific contracts but in some instances the contractors have never heard of the contracts … it was a case of mistaken identity.

“The OFT’s carelessness in making wrongful accusations shows the gung-ho, scattergun approach it has to this inquiry and others. It’s incompetent.”

The mistakes that have come to light relate to accusations made before the OFT published its statement of objection against 112 companies last month.

An OFT spokesperson said: “We are not commenting on individual firms, individual contracts or individual allegations.”

In February a High Court judge criticised the OFT for engaging in “public relations exercises” and “sensationalist publicity” when pursuing investigations into supermarket chain Wm Morrison. That defamation case ended last month with the OFT paying £100,000 and Morrison’s costs.

John Fingleton, the OFT’s chief executive for the past two and a half years, has been criticised for pursuing an aggressive and populist agenda.

Meanwhile, it has emerged that the OFT has dropped three of the six allegations it made against North Midland Construction.

The contractor made in a stock exchange trading statement saying: “The company has been helping the OFT with its enquiries and will be defending the allegations made against it.

“Of the six initial allegations, three have been dropped and three remain, two applicable to North Midland Building Ltd and one to the civil engineering arm.”