The competition watchdog has announced an investigation into “suspected bid-rigging” in a major government fund to improve the condition of school buildings.
The Competition and Markets Authority said it had “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” through the condition improvement fund (CIF).
Around 4,500 academies in small trusts, sixth form colleges and voluntary-aided schools are eligible to bid for CIF cash for smaller maintenance projects, while bigger trusts and local authorities receive direct funding.
The government withdrew funding for “a number of projects” granted school maintenance cash through the condition fund recently, after identifying “serious irregularities” in their applications.
The CMA has now carried out “unannounced inspections” at “several business premises” to gather evidence. It has “particular concerns in relation to roofing contracts”.
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.”
‘Unannounced inspections’
The new government recently ordered a review of the entire system for issuing maintenance funding, amid concerns the current set-up is “too complicated”.
The investigation into suspected bid-rigging launched this week 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 companies are found to have broken competition law, the CMA will issue something called a statement of objections.
This will detail the CMA’s concerns and businesses will have an opportunity to respond.
However, the CMA pointed out “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 said.
The authority said it had issued fines “totalling almost £60 million to firms involved in rigging both public and private sector bids” last year.
A new rule comes into force in February which means any businesses that break competition law could also be banned from bidding on public contracts in the future.
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