News / Nicholson calls for OFT evidence

NHS chief executive David Nicholson has urged trusts to come forward if they believe they have been the victims of bid rigging by construction companies.

The move follows one of the largest ever Competition Act investigations by the Office of Fair Trading. It alleged that 112 constructors have been involved in bid rigging and cover pricing for a number of projects, including hospitals.

Cover pricing is where bidders collude to submit a price or prices intended to be too high to win the contract. The customer is left with a false impression of the level of competition and, as a result, may pay more than is necessary.

The OFT also alleged that a minority of firms struck deals where the winning bidder paid compensation to the loser.

In a letter to NHS chief executives and finance directors, Mr Nicholson said trusts that believed tenders had been manipulated should contact the NHS Counter Fraud and Security Management Service, which is handling health service information on behalf of the OFT.

He added: ‘No assumptions should be made at this stage that there has been an infringement of competition law by any of the companies named by the OFT. However, all NHS organisations should familiarise themselves with guidance from the OFT, especially the note Making competition work for you.’