112 construction firms accused of bid rigging – but why should it be illegal to share bidding costs?
Thursday, April 17th, 2008112 construction firms have been accused of bid rigging by the OFT (Office of Fair Trading) in England. There are two main allegations. One is that they engaged in cover pricing – where one or more bidders collude with a competitor during a tender process to obtain a price or prices which are intended to be too high to win the contract. Cover pricing arrangements have previously been found by the OFT and the Competition Appeal Tribunal to be illegal and in breach of the Competition Act 1998 due to the restrictions on competition that arise.
In addition, a minority of the construction companies have been accused of entering into arrangements whereby it was agreed that the successful tenderer would pay an agreed sum of money to the unsuccessful tenderers (known as a