Council defends hire of ex 'illegal cartel' firm
LDRSA council has defended its decision to hire a firm previously fined £1.4m for being part of an "illegal cartel" rigging bids.
Westmorland and Furness Council appointed DSM Demolition Ltd to knock down the Forum and Market in Barrow after both were closed following safety concerns.
The company was found to have colluded on prices with nine other firms, with them receiving a combined fine of almost £60 million. DSM received a reduced fine after admitting its involvement.
The Lib-Dem led council said the contract was awarded "through a robust, lawful, open and competitive procurement process". DSM has been approached for comment.
The council said the company did not have to disclose its fine as part of the tender process, meaning it could not treat it as a reason for marking down DSM, according to the Local Democracy Reporting Service.
A spokesperson for the authority said: "We recognise that this may lead to questions, however, it does not, in itself, raise issues about current practices, technical competency, operational capability, health and safety competence, or the company's ability to undertake the required demolition works."
'Deliberate low bids'
The Competition and Markets Authority (CMA) said in March 2023, when the ruling was published, that the firms had "colluded on prices" through "illegal cartel agreements" when submitting bids in competitive tenders for contracts between January 2013 and June 2018.
A spokesperson for CMA said: "These bids were rigged, deceiving the customer that they were competitive when that was not the case."
CMA said some of the construction firms had agreed to submit bids "deliberately priced to lose the tender".
"This practice, known as cover bidding, can result in customers paying higher prices or receiving lower quality services."
The council said DSM was listed as an approved contractor for use by central government and the NHS and had delivered "significant projects with other local authorities".
A spokesperson added: "The council takes its responsibilities as a public body extremely seriously.
"Strict contract management and oversight arrangements are in place to protect public funds and rigorous project controls will be applied throughout delivery."
