The UK competition watchdog has launched an investigation into several British roofing and construction services companies over allegations they “illegally colluded to rig bids” to win contracts for repairing schools.
The Competition and Markets Authority (CMA) said it suspected that the companies, including building contractors and technical advisers, had worked together to rig bids to secure contracts funded through the government’s condition improvement fund (CIF), in particular those for roofing jobs.
The regulator, led by the chief executive, Sarah Cardell, did not name any of the companies under investigation. It has carried out surprise inspections at several business premises to gather evidence, including physical and digital documents, and is working closely with the Department for Education (DfE).
CIF money is awarded every year by the DfE and can involve significant sums, with almost £450m made available in the latest round. Funds are awarded to schools with buildings in poor condition, to address health and safety issues as well as building compliance.
Juliette Enser, the watchdog’s executive director of competition enforcement, said: “While no assumptions should be made that competition law has been broken at this early stage, we will be investigating this issue thoroughly. We will now be making inquiries and assessing the evidence to see whether or not bid rigging has taken place – and what further action may be needed.”
If the CMA decides the companies have broken competition law, it will issue a “statement of objections” to set out its concerns, and businesses have an opportunity to respond. At this stage, no assumptions should be made that the law has been broken, the watchdog said.
Public procurement represents about a third of public spending, and evidence from around the world suggests it is highly vulnerable to anti-competitive behaviour.
Last year, the CMA issued fines totalling almost £60m to companies involved in rigging public and private sector bids.
The latest investigation comes before the new debarment regime comes into force in February. This means that any businesses that break competition law could also be banned from bidding on public contracts in the future, in addition to potential financial penalties and director disqualification.
A business or individual involved in anti-competitive conduct may be granted immunity from penalties, or a significant reduction in penalty, in return for reporting cartel activity and assisting the regulator’s investigation. A financial reward of up to £250,000 may be offered in return for information that helps it identify and take action against illegal cartels.
