Fixing the price-fixers

11 July 2007

The Office of Fair Trading (OFT) is currently scrutinising almost 100 UK construction companies for price-fixing.

It is the biggest investigation it has ever conducted into cartels and bid rigging in the industry. What began as a check into irregularities at one hospital in the East Midlands, spread into a huge inquiry with no fewer than 38 companies - a figure unprecedented in an OFT probe - admitting breaking the law in the hope of a more lenient penalty.

In many cases a pair or group of companies agrees beforehand who should win a deal and the losers make an inflated bid, which allows the ‘winning’ bidder to also raise their price.

A senior OFT investigator told BBC Radio 4’s File On 4 (aired last night) that such practices are endemic and widespread in the industry. And an SM reviewer from the sector writes on supplymanagement.com today that many will not be surprised to hear it. So is it almost an accepted part of contracting construction firms – or is there something you can do about it?

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