CMA probes possible bid-rigging in relation to school improvement fund
The CMA has launched an investigation into suspected bid-rigging in relation to a key government fund for improving the condition of school buildings.
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- Unannounced inspections have been carried out at several business premises, to gather evidence
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.
Further details about the CMA’s procedures in competition cases are available in its CMA8 guidance, and any updates to this investigation will be made on the CMA’s dedicated case page: Suspected anti-competitive conduct in relation to the supply of roofing and other construction services.
Notes to editors
- The competition legislation relevant to the CMA’s investigation is the Competition Act 1998.
- The CMA is not naming the parties under investigation at this stage, but may do so at a later stage, including if a statement of objections is issued.
- There is no legal deadline to complete inquiries under the Competition Act 1998. As with all its work, the CMA will progress this investigation at pace whilst ensuring a robust and detailed review is conducted and parties’ rights of defence are respected.
- Under the CMA’s leniency programme, a business that has been involved in certain types of anti-competitive conduct may be granted immunity from penalties or a significant reduction in penalty in return for reporting cartel activity and assisting the CMA with its investigation. Individuals involved in cartel activity may also be granted immunity from criminal prosecution for the cartel offence under the Enterprise Act 2002 and from director disqualification. More information on the CMA’s leniency policy is online.
- The CMA also operates a rewards policy under which it may pay a financial reward of up to £250,000 in return for information which helps it to identify and take action against illegal cartels. For more information on the CMA’s informant reward policy.
- Anyone who has information about a cartel is encouraged to call the CMA cartels hotline on 020 3738 6888 or email cartelshotline@cma.gov.uk.
- All enquiries from journalists should be directed to the CMA press office by email on press@cma.gov.uk or by phone on 020 3738 6460.
- All enquiries from the general public should be directed to the CMA’s General Enquiries team on general.enquiries@cma.gov.uk or 020 3738 6000.