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Construction firms accused of bid rigging

CONSUMER watchdog the Office of Fair Trading (OFT) yesterday dealt out fines adding up to &pound;129.5m to some of the UK&rsquo;s biggest building companies, punishing them for colluding while bidding for work on projects such as hospitals, schools and housing refurbishments.<br /><br />Balfour Beatty, Carillion, Connaught, Interserve, Kier and Galliford Try were among the 112 named and shamed by the OFT yesterday, in the latest blow to the recession-hit construction industry.<br /><br />The OFT said the investigation &ndash; which took more than four years &ndash; found practises of so-called cover pricing, where construction firms secretly agree the prices they will submit during a bidding process.<br /><br />About 80 of the firms, many of which are publicly listed, have admitted that they took part in some kind of bid-rigging, or said that they have applied for leniency in return for assisting the OFT.<br /><br />Just under 200 tenders had been distorted between 2000 and 2006 by cover pricing, the OFT said, on public sector contracts worth billions. <br /><br />The illegal activity was mostly in the form of cover pricing where bidders got rivals to submit artificially high prices. Such bids were not priced to win a contract and gave a misleading impression about the extent of competition, the OFTsaid.<br /><br />In some cases, the unsuccessful bidder was paid an agreed sum of money by the winner, it added.<br /><br />&ldquo;This decision sends a strong message that anti-competitive and illegal practices, including cover pricing, must cease,&rdquo; a spokesman said.<br /><br />AFAST FACTS OF TFINES<br />&9679; The four year investigation, which involved 57 company raids was one of the OFT&rsquo;s biggest.<br />&9679; 199 contract bids were distorted by some form of bid rigging. The companies now face massive fines.