Ten demolition firms named in cartel probe

Grant Prior 2 weeks ago
Share

Cartel busters at the Competition and Markets Authority  (CMA) have provisionally found that ten construction firms illegally colluded to rig bids for demolition and asbestos removal contracts.

The bid-rigging investigation relates to 19 contracts worth over £150m.

Following an investigation launched in 2019, the CMA has provisionally concluded that the firms colluded on prices through illegal cartel agreements when submitting bids in competitive tenders for contracts.

These bids were rigged with the deliberate intention of deceiving the customer that they were competitive when that was not the case.

The bids were rigged by one or more construction firms which agreed to submit bids that were deliberately priced to lose the tender.

This practice, known as ‘cover bidding’ can result in customers paying higher prices or receiving lower quality services.

The CMA is proposing to impose fines on the businesses concerned if it reaches a final decision confirming that they have broken the law.

In addition, the CMA has provisionally found that seven of the firms, on at least one occasion each, were involved in arrangements by which the designated ‘losers’ of the contracts were set to be compensated by the winner.

The value of this compensation varied but was higher than £500,000 in one instance. Some firms produced false invoices in an attempt to hide this part of the illegal behaviour.

The CMA has provisionally found that the collusion affected 19 contracts for demolition work in London and the Midlands, including contracts for the development of Bow Street’s Magistrates Court and Police station, the Metropolitan Police training centre, Selfridges, Oxford University, shopping centres in Reading and Taplow, and offices on the Southbank, London.

Not all of the firms were involved in colluding in each of these contracts, and not every contractor who submitted a bid for these contracts was involved in the illegal collusion.

Eight of the firms have admitted their involvement in at least one instance of bid rigging between January 2013 and June 2018: Brown and Mason, Cantillon, Clifford Devlin, DSM, J F Hunt, Keltbray, McGee, and Scudder.

Two other firms, Erith and Squibb, have not admitted their involvement in any bid rigging and it should not be assumed that they have broken the law.

Michael Grenfell, the CMA’s Executive Director for Enforcement, said:  “The construction sector is hugely important to Britain’s economic well-being. Bid rigging can result in worse deals, which can leave businesses – and sometimes taxpayers – out of pocket.

“This is unacceptable, and the CMA won’t hesitate to come down hard on these activities and impose appropriate fines.”

A Keltbray statement said: “Keltbray strongly condemns anti-competitive practices and, having co-operated fully and formally settled its case with the CMA, acknowledges the findings relating to isolated activities of a previous management team in a subsidiary business.

“As the CMA investigation has confirmed, Keltbray Limited did not benefit from the award of any contracts nor received any compensation payments arising from this infringement activity.

“Since 2019 Keltbray has transformed its organisational structure and corporate governance framework and has assured all stakeholders that these historic practices will not occur in the future.”

John F Hunt said: “John F Hunt acknowledges and accepts the findings of the CMA investigation which has provisionally found that John F Hunt was involved in breaches of competition law in relation to a small number of historic and unrelated bids.

“We note the CMA’s acknowledgement that John F Hunt was not involved in any compensation arrangements relating to those bids.  John F Hunt also did not benefit from the award of any of the relevant contracts.

“The Group has fully cooperated with the CMA’s investigation and is fully committed to compliance with competition law. We have strengthened our competition law compliance measures and do not condone any activity which limits or restricts competition in the market.”

Latest news

Leisure centre legal battle ends 15 years after handover

Allenbuild ordered to pay £2.2m to Sefton Council over defective swimming pool
1 day ago

Morgan Sindall Highways chief departs

Paul Gott exits after 15 years at Morgan Sindall Infrastructure
7 hours ago

Balfour Beatty calls on supply chain to sign-up to Code of Ethics

Code of Ethics will eventually form part of Balfour Beatty contracts and supplier frameworks
7 hours ago

Tolent suffers £4.3m loss after High Street Group collapse hit

Gateshead builder says it returned to profit this year and is eyeing a £1bn work pipeline
6 hours ago

Persimmon build rates fall amid material and labour shortages

Planning delays also hit house builder as completions drop on last year
6 hours ago

Thirty construction workers killed on site last year

Industry fatality numbers drop 25% on previous year
16 hours ago

Construction and housing ministers resign

Industry leaders join mass exodus from government
21 hours ago

Aecom hires Arcadis veteran to grow northwards

Jonathan Moore aims to expand Aecom's business in the Midlands and North
20 hours ago

M&E contractor Kershaw went down owing subbies £10m

More than 400 firms left holding unpaid invoices
1 day ago

Green light for UK’s first plastic recycling park

£165m park in Cheshire will recycle 367,500 tonnes of plastic
1 day ago

Go-ahead for two Tilbury Douglas hospital jobs

Wirrall and Stockport hospital A&E jobs together worth nearly £60m
1 day ago

Nine contractors trailblaze concrete carbon reduction plan

Firms pledge to switch to 30% low emission concrete by 2025
2 days ago

Red Construction lands London Victoria office overhaul

St James's Park building will be extended up by two floors in overhaul
1 day ago

Six locations shortlisted for Great British Railways HQ

Site for national HQ narrows to Birmingham, Crewe, Derby, Doncaster, Newcastle and York
2 days ago

Kit maker Genie fined after M25 work platform death fall

Court hears how calibration error led to death of worker when 40 metre high mobile elevating work platform collapsed
2 days ago

O’Connor Utilities sold to private equity

OCU Group reported to have fetched around £400m
3 days ago

Rolls-Royce shortlists sites for first SMR factory

Three factories will make reactor, civils and MEP modules for SMR nuclear power stations
2 days ago

£233m loan kick starts £3.5bn regen of Royal Docks site

Infrastructure loan paves way for 6,000-home East London Silvertown scheme
2 days ago

Henry Construction wins £33m Oxford housing estate rebuild

Contractor signs off first deal with A2Dominion
2 days ago

Carillion collapse hospital hit by more construction delays

Balfour will take another 18 months to complete Midland Met scheme
3 days ago

Leeds college launches new construction and football course

Students can now combine site and tech skills with learning at a football academy
2 days ago

Willmott Dixon blasts new Building Safety law

Rick Willmott accuses Government of scapegoating construction over its own regulatory failure
3 days ago

£550m plan to redevelop The Galleries centre in Bristol

Shopping centre building to be demolished for major mixed-use scheme
3 days ago

Costain cancels supply chain event on £260m road job

Preparation work for A1 upgrade stalls as Transport Secretary dithers over approval
3 days ago

£170m London Holborn Circus office approved

Demolition work set to start in the autumn for 10-storey office block
3 days ago

City leaders launch net zero construction skills drive

City of London leader warns "skills gap and labour shortage are threats to our net zero ambitions"
3 days ago

Marlborough Highways lands £32m Islington civils deal

Contractor to help with north London borough's green drive
3 days ago

Osborne makes £45m construction loss

Sale of infrastructure business balances books as contractor looks for zero-carbon wins
6 days ago

John F Hunt forecasts record revenue and profits this year

Demolition contractor back on strong financial footing after previously setting aside £5.6m for bid rigging probe
6 days ago

Notting Hill Genesis names £2.8bn framework winners

26 firms land places on main contractor deal: Full list
6 days ago

Contractor services