OFT raids five building firms over price rigging

Construction industry investigation is widened
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The Independent Online

Officials from the Office of Fair Trading have raided the offices of a subsidiary of Morgan Sindall in the past month as the competition watchdog widens its investigation into the construction industry.

The raid follows a recent un-announced swoop on two offices of Mowlem, the construction group owned by Carillion, as part of the same investigation.

At least three other publicly quoted construction and services groups are also understood to have had their offices raided over the same period. Officials may visit rival companies' offices soon.

Legal experts say the OFT is investigating alleged price rigging by construction companies, particularly on public sector contracts such as those involving schools and hospitals. One practice the OFT is thought to be focusing on is cover pricing, when several companies deliberately submit late inferior bids to help another one secure the work.

Mike Pullen, a partner at the law firm DLA, said: "The OFT is under pressure to protect the public purse from anti-competitive behaviour. This has been given added impetus by the [winning of the 2012] Olympics."

There is no suggestion that either Morgan Sindall or Mow-lem is guilty of malpractice.

Morgan Sindall released this statement to The Independent on Sunday: "We can confirm that Bluestone, one of our subsidiaries, is co-operating fully with a routine investigation by the OFT and will continue to do so. We are unable to make any further comment at this time."

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