BUILDING contracts worth £4.6 million in Worcestershire were awarded following illegal bidding by developers.

Construction firms, including Speller-Metcalfe, of Malvern, and Thomas Vale, of Stourport, were fined by the Office of Fair Trading (OFT) following an investigation, as reported by your Worcester News last week.

The illegal bidding set-up, known as cover-pricing, affected a new £3.5 million city primary school, a social housing development and a college training centre.

None of the authorities offering out the tenders were aware they had been scammed until OFT investigators contacted them.

Worcestershire County Council auditors are now trying to work out whether the taxpayer was defrauded in the case of the primary school.

Cover-pricing sees companies submitting a bid for a tender after colluding on how much they are each bidding for the contract.

At worst, the price the authority ends up paying is inflated above the real value of its contract.

Among the tenders affected was the contract replacing Elbury Mount Primary School in Brickfields with the new Fairfield Community Primary School in 2005.

Investigators also found illegal bids on the Gas Training Centre, now The Energy Centre at South Worcestershire College, in Evesham, in 2002. The winning bid was for £461,000.

Both contracts were won by Speller-Metcalfe, which was fined £389,748 by the OFT.

The county council, which placed the primary school tender, said it “utterly condemned” illegal bidding.

Council finance director Mike Weaver said: “Council auditors are studying the OFT findings in detail and further action has to await their conclusions.”

Despite contacting Speller-Metcalfe last week and again yesterday, nobody from the company returned the newspaper’s calls to comment.

The OFT investigation covered the period between 2000 and 2005. There is no evidence of cover-pricing continued beyond this date.

In the third case, a small housing development tender in Holt Heath by social housing group Festival Housing was also hit by cover-pricing.

The tender was awarded for £650,000 after five bids, with developers Thomas Vale, and J Harper, of Herefordshire, both punished by the OFT. Neither firm won the tender.

Richard Grounds, Festival’s commercial director said the social housing firm was happy with the chosen bid.

“We employ building consultants to scrutinise bids. In light of the OFT findings, we will review the process.”