Rigged contracts: your comments

The Office of Fair Trading has accused 112 construction companies of colluding to rig bids for contracts.

They say that the firms fixed contracts at higher prices leading to their customers, including local authorities, paying too much for building work.

Your comments and experiences:

A few years ago I ran a small company which won contracts on a tender basis in the construction industry. After a while I was told the way that things worked: if I was friendly with someone on the client's side and I had been generous with hospitality, such as paying for nights out for "the lads", I would be given the opportunity to submit my bid last and would be told how much the other contractors had bid. At a later stage a "variation order" would be approved which allowed me to bill for fictitious items, so ensuring my profit margin (and a little extra to pay for more hospitality). I felt so uncomfortable with the whole thing that I left the industry and closed my company.
Bill, Glasgow

I was a quantity surveyor and project manager working on public sector contracts until my retirement in 1997. I evaluated tenders and although we always felt that contractors sometimes put in cover prices, we had no idea this was formalised and collusive. This is shocking news given the known regulations to avoid such mal-practice. How can public sector clients trust any contractor now?
Ken, Torrevieja

Bidding high when you do not want the job is entirely normal. The way it works is that many organisations have an "approved bidders" list, as they tend to like to work with firms who they know can do the job. If you are invited to bid but aren't capable of doing the work at that time, you cannot just turn it down because you would be in danger of losing your "approved supplier" status. So you put in a bid which you know is high and is unlikely to win. If it does, then you have enough money in the tender to still find a way of doing the work at a profit. It is only dodgy dealing if you collude with other firms.
Dimengineer, Uxbridge

I'm a buyer and was once responsible for procurement relating to the construction of a new building in Belfast. The Project Manager selected a prime contractor and, when I queried the method of competition, he advised it was "their turn"! Apparently work was simply shared between the main contractors.
DM, Surrey

I worked for a company which supplied the building trade in the 1980s, this sort of thing was rife. It was almost standard practice to over invoice and either kick back those who specified materials or pay off the competition who colluded with you at the quotation stage.
Alan, Zurich

It's very true and very familiar. Why would we take a contract at £10 million when if we work with a few other construction companies, we can all agree to have that price increased to £20 million and split the difference between us? Do that on various projects throughout a year and we can triple or even quadruple our fees.
Barry, London

I am employed in the delivery of major construction projects for a blue chip company and highlighted major irregularities in tendering, valuations and certification. I was repeatedly encouraged to "roll over" when I highlighted matters to my seniors. There continues to be a major cover up. My career, pension, mortgage and future income are at risk if I take it further.
Anon, UK

A very significant part of this problem is caused by the appalling information often issued to contractors in order to compile their tenders. As a quantity surveyor of 36 years experience, I have watched with dismay as the tried and tested means of competitive tendering have given way to "modern and innovative" methods of procurement, all of which have meant the client pays more. Until the major employers (government departments, local authorities) take the lead and insist on clear, concise tender information, contractors will continue to struggle with the tender process and get more devious in their collusion.
Colin, Warrington,

I work in the construction industry and am aware of the situation as it sometimes excludes our company from tender lists as we do not take part in collusive activities. We price all works fairly and feel that the poor ethics of a few cause embarrassment to the entire industry.
Mark, Cambridge

I am an accountant with experience in the building industry. Cover pricing is often used, particularly where there are only a small number of building firms in an area. The motivation is usually to avoid certain sorts of work, chiefly from local authorities. There is tacit agreement that this work is less desirable because of low margins and slow payment systems. Cover pricing arrangements between a small number of firms are used to share the pain around.
John, Wiltshire UK

I worked as a site carpenter and bench joiner for eight years, a good deal of which was spent as a sub-contractor for the larger building firms. Without doubt they are all at it - the building industry is as bent a nine pound note. I quit because I couldn't stand working for such an archaic, greedy and crooked industry.
Doug, Sussex