DfE’s Condition Improvement Fund – CMA Launches Investigation into Possible Bid-Rigging

Oliver Slater, Beth Edwards, Beatrice Wood and Shyann Sheehy share details of a recent CMA investigation into suspected bid-rigging in relation to a government fund.

On 11 December the Competition and Markets Authority (‘CMA’) announced that it had launched an investigation into suspected bid-rigging in relation to a key government fund for improving the condition of school buildings. Bid-rigging has serious competition and procurement implications, and the CMA has issued almost £60 million in fines in the last year alone to firms who have been involved in rigging practices.

Background

This investigation was launched following suspicions that several companies, which provide construction and roofing services, had illegally colluded together to rig bids in an attempt to secure contracts, with particular concerns being raised in relation to the roofing contracts. The funding for these contracts was provided through the Condition Improvement Fund (‘CIF’), which is awarded annually by the Department for Education (‘DfE’) to enable educational buildings to remain safe and in good working order. Eligible academies and six-form colleges under the CIF are able to take out loans for all or part of the project costs referenced in their application, with grant funding only being provided in exceptional circumstances.

Competition Law Implications

The CMA’s investigation has been launched under Chapter I of the Competition Act 1998 (‘CA98’) and is thus linked to the prohibition of agreements which prevent, restrict or distort competition. Whilst no assumptions should be made as to whether competition law has been broken at this stage, it is well accepted that bid-rigging (which can include ‘cover bidding’, whereby parties agree to submit bids that are intended to be unsuccessful/uncompetitive in order to protect an agreed upon low bidder) and collusive tendering can amount to infringements of the Chapter I prohibition. For example, in 2023 the CMA fined 10 construction firms a total of nearly £60 million for illegally colluding to rig bids for demolition and asbestos removal contracts involving both public and private sector bodies.

The CMA is not required to complete its inquiries within any set timeframe and so its investigations will advance at a pace which is deemed appropriate to ensure a thorough review is completed and relevant parties’ rights to a defence are respected. As the first step in its investigation, the CMA already conducted a number of unannounced inspections at relevant business premises to gather any evidence such as physical or digital documentation. The CMA has also worked closely with DfE during this investigation.

The next step in this investigation will depend on whether the CMA provisionally decides that these businesses have infringed competition law. If a decision is made that a likely infringement has occurred after the necessary evidence is gathered, the CMA is required to issue a ‘statement of objections.’ This will set out the CMA’s concerns and provide each business with the opportunity to respond. Currently the CMA has not named the parties under investigation, but they may do so in the statement of objections if issued.

If found guilty, the penalties for competition law infringements can include fines of up to 10% of a business’s annual world-wide turnover for each year it has committed the relevant infringement. However, by cooperating with the CMA with its investigation, businesses may be able to avoid more serious consequences through the CMA’s leniency policy.

Procurement Law Implications

This case also raises several procurement concerns. The funding was provided by DfE (a public authority) following a procurement exercise, and a key role of the CMA is to provide advice to contracting authorities on the competitive procurement process.

The introduction of the Procurement Act 2023 (‘PA23’) on the 24th of February 2025 could have significant consequences for suppliers who infringe competition law. Under this regime, infringement of competition law is a mandatory exclusion ground, meaning that suppliers who (or whose connected persons) are found guilty of infringing Chapter I of the CA98 in relation to an agreement or concerted practice which amounts to a cartel must be excluded from a procurement exercise. The PA23 also introduces a new debarment regime, meaning that, following an investigation by the appropriate authority, a supplier in breach of this mandatory exclusion ground may be added to a centralised, public debarment list. Debarment is crucial to reduce supplier-related risks in public procurement and, due to negative publicity and increased scrutiny for those added to the public list, to incentivise businesses to adhere to corporate compliance and standards of behaviour. All contracting authorities will be required under law to check the centralised debarment list in each procurement they undertake and exclude suppliers accordingly. Once the PA23 comes into force, suppliers will have to consider the implications of a CMA decision beyond fines; suppliers can be added to the list for up to five years, which could have a serious effect on their profits during that time period.

Looking to the future

The Executive Director of Competition Enforcement for the CMA has stated that assumptions should not be made that competition law has been infringed at this stage but has explained that this instance will be thoroughly investigated to ascertain whether any bid rigging has taken place and what follow up action will be required. Any updates on this case will be made on the CMA’s website here.

Oliver Slater, Beth Edwards & Beatrice Wood are Junior Associates and Shyann Sheehy is a Paralegal at Sharpe Pritchard LLP.

This video is for general awareness only and does not constitute legal or professional advice. The law may have changed since this page was first published. If you would like further advice and assistance in relation to any issue raised in this article, please contact us by telephone or email This email address is being protected from spambots. You need JavaScript enabled to view it..