The Competition and Markets Authority (CMA) has reason to suspect that several companies providing roofing and construction services – including building contractors and technical advisors – illegally colluded to rig bids to secure contracts funded through the government’s Condition Improvement Fund (CIF).
The CMA has particular concerns in relation to roofing contracts.
CIF money is awarded annually by the Department for Education (DfE) and can involve significant sums of money. Funds are primarily awarded to schools with buildings in poor condition, to ensure educational buildings are safe and remain in good working order – this includes funding projects that address health and safety issues and building compliance.
Juliette Enser, Executive Director of Competition Enforcement, at the CMA said: “This fund is incredibly important and ensures that essential building improvements can be made to schools throughout England, meaning students are learning in safe and suitable environments.
“While no assumptions should be made that competition law has been broken at this early stage, we will be investigating this issue thoroughly. We will now be making enquiries and assessing the evidence to see whether or not bid rigging has taken place – and what further action may be needed.”
The investigation, launched this week, has commenced with unannounced inspections by the CMA at several business premises. The purpose of the inspections is to gather any relevant evidence, including physical or digital documents, to assist the CMA in its enquiries. The CMA has also worked closely with the DfE throughout its investigation.
If the CMA provisionally decides that the companies have broken competition law, after assessing the evidence gathered, it will issue what is known as a statement of objections. This details the CMA’s concerns and businesses have an opportunity to respond. However, not all cases proceed to a statement of objections, and, at this stage, no assumptions should be made that the law has been broken.
Public procurement represents around a third of public expenditure and evidence from around the world suggests it is highly vulnerable to anti-competitive behaviour. The CMA provides advice to government and public authorities across the UK on the design of competitive procurement processes. In addition, last year the CMA issued fines totalling almost £60 million to firms involved in rigging both public and private sector bids.
The CMA’s investigation comes in advance of the new debarment regime, which is expected to come into force in February 2025. This means that any businesses which break competition law could also be banned from bidding on public contracts in the future – in addition to the risk of financial penalties and potential director disqualification, which are available under the current regime.
