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‘Change the words a bit’ - how bid riggers operate

6 June 2019 | By Neil Gerrard

Emails sent within some of the five fit-out firms to be fined over £7m for breaking competition law - Fourfront, Loop, Coriolis, ThirdWay and Oakley - have revealed how employees deliberately submitted bids that were designed to lose.

The Competition and Markets Authority has published the emails to illustrate how on 14 occasions, one company who wished to win a contract arranged for one or more of the other companies to submit a cover bid to allow the first company a higher chance of winning the work.

Once agreed, in almost all instances, the firm instigating the scheme told the company providing a cover bid what price it should submit. In most cases, the instigator also provided the cover bidder with completed costs and/or design plans, with the intention that the cover bidder submit these as its own bid.

One email sent between directors of two of the firms, read: “Make sure you change order / words a bit so its looks like yours.”

Another read: “Attached is version to send to [company 1 director] …This is about (x)% over our base price … ask him to logo up and send with covering email.”

'It needs to be rubbish'

And an internal email from a director of ThirdWay to a colleague showed the intention to make the cover bids deliberately overpriced. It read: “It needs to be rubbish and ultimately not work.”

Meanwhile a text message from a director of Loop to a director of ThirdWay read: “He (the commercial property agent) wants us to quote this […] job, but do you want to do a crappy plan and exorbitant cost for us…"

The investigation was started after a sixth company, JLL, contacted the CMA to admit its involvement. That company avoided a fine under the CMA’s leniency programme, because it brought the conduct to the CMA’s attention and cooperated with the CMA’s investigation.

The CMA warned companies never to submit a cover bid, even if they do not want to win the tender or take on the work. “You should not submit a cover bid just to keep onside with customers or project managers,” it warned.

Meanwhile, Vp has announced that it has set aside a provision of £4.5m against a possible fine from the CMA, after it was accused of breaching competition law in the temporary groundworks sector. Vp said it was reviewing the alleged breaches and expected to report to the CMA shortly.

It was named in April this year alongside M.G.F. (Trench Construction Systems) Ltd and Mabey Hire Ltd in a statement of objections from the CMA alleging that the companies had broken competition law bt co-ordinating to keep prices up.

Comments

If the tendering body did not run selected tender lists, approved bidder lists and remove no bidders from their tender lists this law would not be necessary.

It further penalises contractors who have too much work and/or would prefer not to bid for a particular project

Like many of our laws what started as a good idea forces contractors to bid for everything and runs the risk of another Carillion

Usual lake of applied common sense

David

David Roberts, 6 June 2019

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