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Notts hospital job in 2004 kicked off the whole affair

One morning in November 2004, the £30 million redevelopment of Queen’s Medical Centre in Nottingham changed from being just one of hundreds of hospital upgrade schemes around the country to become the trigger for the biggest investigation ever seen into the UK construction industry.

Two men were arrested after concerns were raised about the award of contracts for capital building projects. They included the trust’s head of capital investment, Jonathan Palmer.

At this stage the OFT was called in, along with investigators from the Serious Fraud Office. While the SFO later found there was insufficient evidence to support a case, the OFT was not so easily dissuaded.

In July 2005 it raided 22 firms across the East Midlands. This evidence-gathering exercise produced more information causing the OFT to widen its investigation significantly.

By summer 2007 some of the industry’s leading listed firms had confirmed to the City that they had been dragged into the investigation. The OFT started to make noises about record fines and rewards for whistleblowers coming forward with more information.

In the end the burden of the investigation became too much for the OFT.

With evidence of thousands of apparent offences, the watchdog decided to concentrate on the 240 bids for which it had the most evidence; 112 firms were involved.

In all, 37 of these have applied for leniency, with 40 contractors admitting some form of bid-rigging activity.

It is understood that all but nine are accused of cover-pricing - whereby a firm that does not have the resources to carry out a job it is tendering for contacts rival bidders to ensure its price will not win the job.