Cover Pricing is where firms secretly agreed the prices they would submit during a tender process. Firms that do not want to win the contract submit prices that are much too high. This gives the client the impression that they are getting a good deal – the reality is they are paying well over the odds. It isn’t uncommon for the firms putting in cover bids to be rewarded with a secret payment.

Some of the UK’s leading building companies have been handed big fines by the Office of Fair Trading (OFT) for rigging bids for contracts.

The OFT has fined a total of 103 firms £129.5m for colluding with competitors on building contracts.

It said the firms colluded among themselves during the bidding process, leading to customers, such as local authorities, having to pay too much.

The ruling comes at the end of a five-year investigation by the OFT. BBC.

Big fat pigs with their snouts deep in the taxpayer’s trough. Still you have to love their reasoning.

The UK Construction Group, which represents 29 contractors, called the decision to penalise the firms “unfair”.

“Everybody knows – including the OFT – that cover pricing was widespread in the industry in the past,” said the body’s director Stephen Ratcliffe.

“It is perverse and unfair to impose such disproportionate penalties on a small number of contractors selected by geographical sampling.”

Adam Aldred, competition partner at law firm Addleshaw Goddard, which represents five of the firms investigated, said the OFT was the first competition authority in Europe to rule against building firms for the practice of cover pricing. BBC.

Perverse and unfair – not as perverse as their stealing money destined to build hospitals – and let’s hope this is the first of many rulings against cover pricing. Don’t ever forget they’ll do anything for a profit.