Watchdog fines construction firms £60m over bid rigging scandal

24 March 2023

Ten UK construction firms have been fined almost £60m by the Competition and Markets Authority (CMA) for collusion.

The investigation, which looked into the bidding of 19 public and private sector contracts worth more than £150m, found the firms were colluding on prices through illegal cartel agreements.

Projects in the scope of the investigation included those involved in demolition and asbestos removal in the likes of the Selfridges department store and numerous University of Oxford buildings.

The CMA declared bid rigging had taken place on contracts between January 2013 to June 2018 by construction companies Brown and Mason, Cantillon, Clifford Devlin, DSM, Erith, JF Hunt, Keltbray, McGee, Scudder, and Squibb. In total, the firms have now been fined £59,334,957.

Commenting on the case, CMA executive director for enforcement, Michael Grenfell, said: “The construction sector is key to our country’s prosperity, so we want to see a competitive marketplace delivering value, innovation, and quality.

“Today’s significant fines show that the CMA continues to crack down on illegal cartel behaviour. It should serve as a clear warning that the CMA will not tolerate unlawful conduct which weakens competition and keeps prices up at the expense of businesses and taxpayers.”

The CMA disqualified three directors as part of its investigation, including a now former director of Erith, as well as the current and former directors of Cantillon.

Grenfell added: “Company directors must understand that they have personal responsibility for ensuring their companies comply with competition law, and that disqualification may follow if they fail to do so.”

Five of the firms were found guilty of cover bidding, where firms agree to submit bids which are deliberately priced to lose, to create the illusion of competition.

It found five firms did, on at least one occasion, have arrangements where the designated contract 'loser' would be compensated by the winning firm.

The highest payment made to a predetermined losing bidder was £500,000, the CMA said.

The watchdog began its investigation in 2019, which included organising 15 raids, interviewing 35 people and serving more than 120 notices for documents, emails, phones and financial records. 

Eight of the firms – Brown and Mason, Cantillon, Clifford Devlin, DSM, JF Hunt, Keltbray, McGee and Scudder – were given reduced fines for admitting their involvement in the cartel activity.

The remaining two firms – Erith and Squibb – have not commented. 

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