Industry braces itself for bid-rigging storm

The construction industry is gearing up for a potential storm of negative publicity amid speculation that the preliminary findings of an Office of Fair Trading (OFT) investigation into ‘bid rigging’ are imminent.

The Construction Confederation (CC) has hired PR experts Madano Partnerships in advance of the publication of the OFT’s Statement of Objections, which could arrive as early as this month.

The investigation, the biggest in the OFT’s history, is expected to garner national coverage and could see contractors across the country landed with millions of pounds worth of fines.

One industry figure told CJ: “If I were a betting man, I would say that it [the Statement of Objections] will appear at some time in April.”

The Statement of Objections is a legal document which will be sent out to all the contractors the OFT thinks are caught up in cartel activity, detailing how and why it suspects their involvement.

Although the dossier will not be made public, it looks likely that a raft of contractors’ names implicated in the investigation will be published in a press release at the same time.

The suspects will then have between one and two months to study the evidence against them and make submissions before the OFT decides on the size of fines it will dish out.

It has the power to fine companies up to 10% of their relevant turnover if they are judged to be guilty of fixing bids.

The probe, which the OFT claimed last year took in thousands of contracts worth a total of £3bn, has mainly focused on building activity in the East Midlands, Yorkshire and Humberside areas up to 31 December 2006.

The OFT has remained tight-lipped on details of what findings the Statement of Objections might contain, or even when it is expected to be released.

But in refusing to supply any more up-to-date information on how the investigation was progessing, a spokeswoman for the OFT appeared to indicate that it was expected very soon.

“We know that we are going to be announcing something in the next few months. It’s probably a little too close [to release more up-to-date information]. There’s a reason,” she said.

A spokesman for the CC said: “Clearly the inquiry is a serious matter with important implications for the industry. We hope the OFT’s response to the results of the inquiry is proportionate and any alleged infringements are placed in their proper context.”