Rachel Bickler considers the destructive impact of collusive bidding practices
The Office of Fair Trading (OFT) issued a Statement of Objections (SO) to 112 firms in the construction sector earlier this year. An SO is a formal statement setting out the OFT’s allegations of anti-competitive behaviour—in this case that the companies concerned have been engaged in colluding over tendering. The main allegation is that the firms have beeninvolved in “cover pricing”, ie where one or more bidder colludes during a tender procedure to deliberately off er a price that is too high to win the tender, whether to ensure that another bidder wins or to avoid being omitted from further tenders if no bid were submitted.
The OFT’s investigation began with a complaint in 2004 in the East Midlands but the OFT has indicated that it is currently reviewing 240 separate, potential infringements. During the course of its inquiries, the OFT raided the business premises of 57 companies to collect evidence. The OFT has indicated that 37 companies have provided information in exchange for leniency, ie a reduction in any fineimposed, and that a further
