Sisk faces UK fine for 'cover priced' tender

ONE OF the Republic’s biggest building companies is facing a £6.2 million (€6.9 million) fine in Britain for a competition law offence.

John Sisk and Son UK and its Irish parent, Sicon, were yesterday named as among 103 building companies found to have engaged in illegal tendering practices in Britain earlier in the decade.

The company is facing a £6.19 million fine for the offence, but said yesterday that while it is not disputing it infringed competition rules, it plans to appeal the severity of the punishment, which it described yesterday as “excessive in the extreme”.

According to Britain’s competition watchdog, the Office of Fair Trade (OFT), which imposed the fine, Sisk was involved in “cover pricing”. The OFT’s statement describes this practice as submitting an artificially high bid for a particular job to give the appearance of competition, rather than the aim of winning the contract.

“Cover pricing left clients unaware that not all the bids they had received were genuine,” the OFT said yesterday. “As a result, they were unable to make an informed decision as to whether to seek replacement bidders, who may have been cheaper.”

The office added the practice may have reduced opportunities for other competitors, and clients were left with a misleading impression of the level of competition available.

Sisk submitted a cover price in relation to a £2.7 million contract for work on the Waterfront Business Park in Merry Hill in the English west midlands in 2003.

The company said yesterday the fine related to one isolated offence dating back to a time when the law in this area had not been fully clarified. It pointed out it co-operated fully with the OFT’s investigation.

Group chief executive Liam Nagle said yesterday the company was surprised and disappointed at the OFT for imposing a fine on turnover that includes non-UK and non-construction-related revenues.

Paul Wilson, managing director of its UK operations, said the firm has since put compliance procedures and practices in place.

Other Irish-connected businesses, Durkan Ltd, Durkan Holdings Ltd and a related firm, Concentra Ltd, were fined £6.7 million for another offence. The OFT statement shows an English company, Mansell, paid £60,000 compensation to Durkan in relation to tenders for a building contract in London in 2003.

The OFT said its investigation discovered over 4,000 incidents of cover pricing in Britain’s building industry. The Republic’s Competition Authority would not comment yesterday on whether it is carrying out a similar investigation of bidding practices in the Irish building industry.