Makers fined £526k in bid collusion case

Makers has lost its appeal against the Office of Fair Trading's (OFT) decision that it colluded, along with two other contractors, on bids for a re-roofing project in London. It now faces a £526,500 fine.

The news comes after £2.3m in fines, reduced to £1.6m through the OFT's leniency programme, was handed out to 13 roofing contractors for collusive tendering for flat roof and car park surfacing contracts between 2000 and 2002.

Makers, part of Keller Group, received the fine for its part in collusion with Rock Asphalte and Asphaltic Contracts over a tender for a fixed-price project at Elliott House, London. The company appealed against the infringement and the level of penalty.

The OFT's case rested on a fax sent by Barry Abbott - at the time the managing director of Rock - to Joe Kelley, the then managing director of Asphaltic. The fax included three sets of schedule of rates and three tender summaries for the project.

After comparing the figures set out in the fax with those included in the bids submitted by the parties, the OFT found that those submitted by Asphaltic and Makers were identical to parts of the figures set out in the fax.

For its part in this and 16 other infringements, Rock Asphalte was fined £852,253, reduced to £511,351 by leniency, while Asphaltic received a £22,255 fine, which included two other infringements.

In its defence, Makers claimed that it was looking to subcontract the work and did not realise that the figures provided by Asphalitic came from Rock. The tribunal considered this explanation "simply not credible" and upheld the decision.

Makers also appealed against the penalty it received. It was fined £6,500 (5% of its turnover in the market of mastic asphalt in 2004), plus a £520,000 uplift. The uplift was based on a "minimum deterrence threshold", which considers that if Makers' turnover in the relevant market is less than 15% of its total turnover (which stood at £69m for 2004) then it does not act as "sufficient deterrent".

Makers, which maintains its innocence, is now considering a further appeal in the High Court.