Over 100 UK building companies fined by the office of fare trading
Some of the largest UK building companies have been fined for the illegal practice of providing “Covers”.
The process until recently was quite wide spread, many of the companies involved have defended their actions by claiming that they were forced into this position by the tender process. Many of the contracts involved were for multi-million pound public construction projects. The process of “providing a cover”, is when estimators or quantity surveyors swap prices between competitors and provide each other with “cover prices”. One company who do not wish to provide a genuine tender would rather provide a “cover price”, provided to them by a competitor, than been seen by clients not to offer a tender.
They defended their actions by saying they were forced to use “covers”, rather than potentially lose future contracts. The office of fare trading argued that this caused collusion and the potential for price fixing. These fines have come at a bad time for many construction industry companies, as even though we are thought to be out of the recession they are still suffering from the down turn. The office of fare trading has given some up to 3 years to pay the fines imposed.