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Prettys Solicitors Ipswich

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CMA ruling demonstrates warning to all of us

On Friday 12 April 2019, the Competition and Markets Authority (CMA) found that six office fit-out firms have infringed competition law by engaging in cover bidding on 14 construction contracts. The contracts in question were for the supply of services involving the fit-out, design and refurbishment of commercial and non-residential premises between 2006 and 2017.

Cover bidding typically involves collusion among bidders resulting in the submission of bids deliberately intended to lose a contract (thereby diminishing intensity of competition). Those of us involved in the preparation and submission of tender responses may well have found ourselves providing declarations in stipulated forms to tackle precisely this issue (e.g. confirming that our tender is bona fide and that our tender pricing has not been communicated to, nor adjusted by arrangement with, any third party.)

The CMA imposed fines totalling over £7 million on five undertakings, to members of the Fourfront, Loop, Coriolis, ThirdWay and Oakley groups. Under the CMA’s leniency programme, a sixth party (a member of the Jones Lang LaSalle group) escaped a fine having been the first to confess participation in the arrangement and cooperated with the CMA’s investigation.

As for the immediate next steps, the undisclosed victims will no doubt be in the process of assessing their potential damages claims where and to the extent they have been overcharged as a result of the anti-competitive conduct. Meanwhile, those of us bidding for construction projects can use the CMA’s decision this month as an opportunity to cross-check the adequacy and significance of our own risk management practices whenever putting tender responses together.

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