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Oft Fines Construction Sector £129.5m For Bid-rigging

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http://business.timesonline.co.uk/tol/busi...icle6843798.ece

The Office of Fair Trading (OFT) today fined the construction industry £129.5 million at the end of a four-year cartel inquiry into collusion between companies bidding for public sector contracts.

Today's fine is far lower than had been expected. The OFT has the power to impose fines of up to 10 per cent of turnover against a company for cartel activity but today’s £129.5 million penalty is believed to be equivalent to between 1 per cent to 2 per cent of a business’s turnover.

The OFT had accused 112 companies of colluding to rig bids on building contracts worth as much as £3 billion, beginning the probe in 2004 after a complaint from an East Midlands council. In total, 103 companies were fined today for 199 tenders between 2000 and 2006 worth £200 million.

Balfour Beatty has been fined £5.2 million, Carillion must pay £5.3 million while Ballast Nedam has been penalised for £8.3 million.

Out of the total 103 companies that were fined, 86 businesses were granted reductions to penalties either through applications for leniency, acceptance of a "fast -track offer" from the OFT or they had made admissions for a smaller fine after the OFT published its Statement of Objections last year.

The OFT has been under intense pressure from industry bodies to soften its stance against anti-competitive behaviour in the sector amid fears that substantial fines could cripple companies reeling from the downturn. The industry is expected to shrink in value by 10 per cent this year. Construction companies feared an adverse finding could prevent them from bidding in future for contracts awarded by public bodies.

It is understood that construction companies have been contacted to confirm Lord Mandelson's position that businesses subject to today's decision and fines should not be automatically barred from future tenders for public sector work or face adverse conditions that would make it difficult to bid for work.

Once more the taxpayer gets screwed and ripped off.

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why isnt the FRAUD being met with some Prison time? millions in crime against the taxpayer, and no-one loses their tan?

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why isnt the FRAUD being met with some Prison time? millions in crime against the taxpayer, and no-one loses their tan?

Bidding up the price clearly isn't illegal, especially when it's the taxpayer footing the bill. I wonder how many private sector companies would sue for over paying?

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Complete and utter BULL SHEET!!! The main reason imho why the public sector get so many cover bids back is a problem entirely created and perpetuated by the bureaucracy, red tape and processes and procedures manual that the public sector is unable to deviate from.

*Turn the swear filter off you fascist swines*

B)

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It's the Mandelsonian Baroness Scotland defence:

Technical breach of the rules and a small fine.

It is understood that construction companies have been contacted to confirm Lord Mandelson's position that businesses subject to today's decision and fines should not be automatically barred from future tenders for public sector work or face adverse conditions that would make it difficult to bid for work.

Injin wrong about the coming failed state. It already happened. This is what Fascism looks like.

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The way that I understood this was that many companies didn't want work on offer so put in high tenders thus ensuring that they would be out of the running. They put in a tender because otherwise they would be dropped from the lists for future works. I don't see what is wrong with this tbh, it is the governments fault for running tender lists in that way although it did enable companies getting the work to jack the price up because of a lack of competition.

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The way that I understood this was that many companies didn't want work on offer so put in high tenders thus ensuring that they would be out of the running. They put in a tender because otherwise they would be dropped from the lists for future works. I don't see what is wrong with this tbh, it is the governments fault for running tender lists in that way although it did enable companies getting the work to jack the price up because of a lack of competition.

Thank ye kind sir for striking t'nail firmly on t'ead wit t'ammer. Quite why after however many years of OFT investigation and millions spent the same conclusion remains invisible to our glorious government is beyone me.

Edited by Concrete Jungle

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