OFT hammers cartel bid rigging

30 March 2005
More legal news

31 March 2005 | David Arminas

The Office of Fair Trading (OFT) has stepped up pressure on organisations involved in price cartels with a string of convictions and a warning to public sector purchasers.

Speaking to Supply Management, director of cartel operations Simon Williams said lower-spending bodies should be particularly aware of the potential for bid rigging and collusive tendering.

"It is sometimes easy for suppliers to get away with collusion on tendering if the purchaser in a small authority is hard-pressed for time, has few resources and help and has little experience handling tenders," he said.

"I urge these purchasers to be careful."

The warning comes as the OFT fined 10 roofing contractors in Scotland and north east England a total of £830,000 for fixing prices and for deciding between themselves which company should bid for certain contracts. Many of these were in the public sector and included work on a number of schools, a town hall and a business park.

This comes just days after a competition Appeals Tribunal upheld an earlier OFT decision to fine two other roofing firms.

"However," Williams said, "it doesn't necessarily follow that roofing has a particular problem above other construction areas".

He said the agency's leniency programme, which grants firms 100 per cent exemption if they confess to the OFT before it launches an investigation, is showing results.

"I encourage firms to come to us before their competitors shop them first," added Williams.

Alan Bennett, head of technical support and procurement at Neath Port Talbot County Borough Council, said that small councils are always aware of the problems associated with contract awards.

"We have been suspicious about close tender prices from time to time and on one occasion reported it to our internal auditors," he said.

"But even if we suspect it, we don't have the resources or the time to find out more.

The OFT's finding should be lesson to us all to become more vigilant."

  • Purchasers who suspect a cartel is operating can call the OFT hotline: 020 7211 8888.

    SMmar2005

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