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OFT firms face exclusion from council tender lists

February 1st, 2010

North Yorkshire is latest council to turn up heat on contractors, but lawyers warn more could follow

Contractors are facing exclusion from local authority tender lists, as scrutiny intensifies in the wake of the Office of Fair Trading probe into bid rigging.

It has emerged that news that two large councils have questioned firms about their involvement in the probe. At the same time, lawyers claim many others are looking to redraft tender documents to include questions that will weed out implicated contractors.

This week, North Yorkshire became the latest council to reveal it was examining firms’ involvement in the inquiry and has written to all 103 named to ask if they have been involved in anti-competitive activities.

A council spokesperson said it would not automatically exclude those on the list, but that they would be “closely monitored”.

Meanwhile, Leeds council has stepped up its investigation into 32 firms that it uses. It has written to them seeking details of their involvement in bid rigging and said it may exclude firms from future work, including the £1.2bn Yorbuild framework, after assessing individual cases.

The council would not reveal which firms it had written to, but the Office of Fair Trading (OFT) alleged Carillion, Strata, Caddick, Richardson Projects, P Casey and Henry Boot had engaged in cover pricing on projects in Leeds.

Meanwhile, several lawyers have noted a rise in the number of local authorities and public sector clients enquiring about firms involved in the probe and warned that several could already be blacklisted by councils. One lawyer said: “We’re definitely seeing an increased level of awareness from public clients.”

The news comes in the week contractors won an early courtroom battle with the OFT, after a judge ruled on Monday that it would have to pursue cases on an individual basis rather than in batches.

Tristan Meears-White, a partner at Watson Burton, said: “The ruling could save contractors tens of thousands of pounds. Firms might have been required to turn up to several different hearings otherwise.”

The boss of one major contractor described this week’s decision as “very encouraging”. Another boss said: “This decision doesn’t suit the OFT at all because of the resource issue. It’s not exactly a major win for the contractors, but it’s undoubtedly a headache for the OFT.”

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