The 10 builders have been jointly fined £60m by the competition regulator for “unlawfully colluding” to rig bids for lucrative contracts for projects including Bow Street Magistrates Court and Selfridges department store.
The Competition and Markets Authority (CMA) found that the firms carteled more than 19 private and public sector contracts worth a total of £150m.
The regulator said contracts were found to have been manipulated between 2013 and 2018 using a tactic known as “bidding”.
Cover bidding involves companies conspiring to help each other win contracts by submitting substandard or exaggerated bids that give a false impression of competition while ensuring that the competing bid will win.
The losing bidder could then return the favor on a different contract. The Capital Markets Authority said that this practice could lead to clients, such as the public sector, paying excessive amounts or receiving low-quality services.
The CMA said 10 companies in the demolition and asbestos services trade were involved in the cartel, named Keltbrae, Brown & Mason, Cantillon, Clifford Devlin, DSM Demolition, Erith Contractors, John F. Hunt, McGee, T. Scudder and Squibb.
Five of them were found to have entered into arrangements whereby the company which had willfully ‘lost’ the bid was compensated by the winner, in one case over £500,000. The Capital Market Authority said some companies submitted fake invoices to hide bid-rigging.
“The construction sector is key to our country’s prosperity, so we want to see a competitive market that delivers value, innovation and quality,” said Michael Grenfell, CMA’s executive director of law enforcement. Today’s large fines show that the CMA continues to crack down on cartel behavior. illegal.
“It should serve as a clear warning: the CMA will not tolerate illegal behavior that weakens competition and keeps prices high at the expense of companies and taxpayers.”
The CMA said that in addition to the fines, three directors of companies involved in the cartel’s proceedings were disqualified.
The regulator began its investigations in 2019, carrying out 15 raids, interviewing 35 people, and filing more than 120 notices requiring information or documentation. It also performed a detailed review of emails, mobile phone communications and financial records of interested parties.
Brown, Mason, Cantillon, Clifford Devlin, DSM, John F Hunt, Keltbray, McGee, and Scudder were all handed reduced fines after admitting their involvement in cartel activity. McGee’s and Scudder’s penalties also include a deduction under the CMA’s leniency program.