Tuesday, September 22, 2009

Bid-rigging: OFT urges clients not to exclude guilty contractors

The Office of Fair Trading has issued a statement urging clients not to automatically exclude contractors who have been fined after being found guilty of bid-rigging.

Read the full statement here

The OFT said it "had to focus its investigation on a limited number of companies and instances where the available evidence was
strongest, in order to make best use of its resources and conclude its investigation within a reasonable timeframe. The OFT could not, therefore, pursue every firm suspected of involvement in cover pricing.

"Moreover, the endemic nature of the practice within the industry suggests that many other companies are likely to have been involved in bid rigging, even though such activity remained undetected. For this reason, it cannot be assumed that the Parties are the only companies that may have engaged in cover pricing.


OFT urges clients not to exclude guilty contractors


"In light of the above, it is the recommendation of both the OFT and the OGC, that the Parties should not be excluded  automatically from future tenders on the grounds that they are Parties to the Decision, or be the subject of similar adverse measures making it more difficult for them to qualify for such tenders.

"Public authorities are advised to consider the specifics of their procurement, as well as the points outlined below, in deciding the most appropriate course of action on a case by case basis.

"The OFT considers that the following factors are relevant to the above:

"The Parties have received significant financial penalties appropriate to the infringement findings in the Decision; "It would be wrong automatically to assume that construction companies that are not named in the Decision have not also been involved in bid rigging; "As a result of the OFT’s investigation, the Parties can be expected to be particularly aware of the competition rules and the need for compliance and, if anything, are more likely to be compliant; and "Many of the Parties have cooperated fully with the OFT’s investigation and a significant proportion have taken measures to introduce or reinforce formal compliance programmes and to ensure that their staff are aware of their competition law obligations."

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