The largest trade association in the building industry, however, has hit back at the OFT's announcement, saying it is 'unfair' because they 'reflect old practices'.
The fines were made for cover pricing, or bid-rigging, where one or more bidders in a tender process obtains an artificially high price from a competitor.
The OFT said such cover bids are priced so as not to win the contract but are submitted as genuine bids, which gives a misleading impression to clients as to the real extent of competition. This distorts the tender process and makes it less likely that other potentially cheaper firms are invited to tender.
The regulator said it found infringements affected projects across England, worth in excess of £200 million, and included schools and hospitals.
Simon Williams, the OFT's senior director for this case, said: 'Our investigation has uncovered significant infringements of competition law on nearly 200 projects across England.
'Bidding processes designed to ensure clients and in many cases taxpayers receive the best possible choice and price were distorted, creating a real risk of increased prices.
'This decision sends a strong message that anti-competitive and illegal practices, including cover pricing, must cease.'
However, the Federation of Master Builders (FMB) have hit back at the OFT's announcement, saying the construction industry has already moved on ahead of today's announcement.
Richard Diment, director general of the FMB said: 'Today's fines reflect old practices in the construction market which have since been changed.
'It is unfair that some firms have been singled out for fines when cover pricing was a widespread practice across the construction industry and was known to the OFT but the fundamental issue now must be to ensure that these companies are not further penalised by public sector clients refusing to do business with them.
'Given the current economic climate and the fact that the construction industry has already taken positive action to address the issue of cover pricing today’s fines serve little purpose other than adding to the industry's woes.'
One of the companies fined was Mansell, a subsidiary of Balfour Beatty, one of the UK's largest construction groups.
Mansell was fined £5.2m for practices that took place before its acquisition by Balfour, the company said.
A statement for Balfour Beatty reads: 'The company and its operating businesses have co-operated fully with the OFT in all aspects of its investigation.
'In light of the investigation, Balfour Beatty carried out a thorough and detailed audit of all its businesses to ensure that it is fully compliant with all aspects of competition law.
'Balfour Beatty neither promotes nor condones anti-competitive behaviour.'
No comments:
Post a Comment