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Bid-rigging raids hit Midlands firms

More than 20 companies targeted following whistleblowing late last year

THE OFFICE of Fair Trading has raided the premises of 22 construction companies in the East Midlands as part of an investigation into collusive tendering.

The searches, one of the OFT's biggest operations to date, were sparked by information it uncovered last November after a whistleblower made allegations of bidrigging for construction and renovation work on public and private contracts in Nottinghamshire.

An OFT spokeswoman said: 'Previous inspections at the end of last year gave us reasonable grounds to suspect that these firms may have been involved in bidrigging activities.' In a parallel investigation after a tip-off from the OFT, the Serous Fraud Office raided two residential and two business premises in Nottinghamshire and Derbyshire as part of a probe into contractual irregularities on the award of construction contracts at the Queen's Medical Centre, Nottingham.

Investigators seized paperwork and computers, assisted by officers from Leicestershire, Nottinghamshire and South Yorkshire Police.

It is understood the SFO was called after allegations that millions of pounds of building contracts at the QMC were let to the same company.

Two people were arrested under caution and later released without charge. The SFO's investigation is still ongoing.

Construction News understands that most of the firms visited in the latest raids were main contractors in Nottinghamshire, Leicestershire, Derbyshire and South Yorkshire.

One medium-sized Nottingham firm contacted by Construction News said: 'We have been advised by our solicitors not to talk to anyone.' The OFT is probing contracts awarded between 2000 and 2005 under civil powers granted to it in the Competition Act. But it has not ruled out using its criminal powers under the much more serious Enterprise Act, used to break up hardcore cartels.

If a company is found guilty of being part of a cartel, it can be fined up to 10 per cent of turnover and its directors can be sent to prison for up to five years.

The OFT has promised to take a tough stance in cases where construction projects are procured using taxpayers' money.