Illegal cartels in construction industry
[edit] CMA provisionally finds illegal cartels in construction industry
The Competition and Markets Authority (CMA) has provisionally found that 10 construction firms illegally colluded to rig bids for demolition and asbestos removal contracts.
Following an investigation launched in 2019, the Competition and Markets Authority (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 demoltion 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 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 2o18: 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."
The CMA’s findings are provisional, and it should not be assumed that any company has broken the law at this stage. The final total of any fines to be paid will also be determined at the end of the investigation.
The CMA’s “Cheating or Competing” campaign has advice for businesses to help them spot, report and deter illegal anti-competitive practices such as market sharing, fixing prices and bid-rigging.
More information on this case is available on the Supply of construction services case page.
Article appears on the CIAT news and blog site entitled "CMA provisionally finds illegal cartels in construction industry" dated June 24 2022.
--CIAT
[edit] Related articles on Designing Buildings
Featured articles and news
Deputy editor of AT, Tim Fraser, discusses the newly formed society with its current chair, Chris Halligan MCIAT.
Barratt Lo-E passivhaus standard homes planned enmasse
With an initial 728 Lo-E homes across two sites and many more planned for the future.
Government urged to uphold Warm Homes commitment
ECA and industry bodies write to Government concerning its 13.2 billion Warm Homes manifesto commitment.
Places of Worship in Britain and Ireland, 1929-1990. Book review.
The emancipation of women in art.
CIOB Construction Manager of the Year 2025
Just one of the winners at the CIOB Awards 2025.
Call for independent National Grenfell oversight mechanism
MHCLG share findings of Building Safety Inquiry in letter to Secretary of State and Minister for Building Safety.
The Architectural Technology Awards
AT Awards now open for this the sixth decade of CIAT.
50th Golden anniversary ECA Edmundson awards
Deadline for submissions Friday 30 May 2025.
The benefits of precast, off-site foundation systems
Top ten benefits of this notable innovation.
Encouraging individuals to take action saving water at home, work, and in their communities.
Takes a community to support mental health and wellbeing
The why of becoming a Mental Health Instructor explained.
Mental health awareness week 13-18 May
The theme is communities, they can provide a sense of belonging, safety, support in hard times, and a sense purpose.
Mental health support on the rise but workers still struggling
CIOB Understanding Mental Health in the Built Environment 2025 shows.
Design and construction material libraries
Material, sample, product or detail libraries a key component of any architectural design practice.
Construction Products Reform Green Paper and Consultation
Still time to respond as consultation closes on 21 May 2025.
Resilient façade systems for smog reduction in Shanghai
A technical approach using computer simulation and analysis of solar radiation, wind patterns, and ventilation.