Construction firms involved in major projects to build healthcare facilities have been accused of anti-competitive practices. The Office of Fair Trading last week named 112 companies it suspects of bid-rigging.

Most cases were for public sector contracts, including tenders for hospitals. The practice generally inflated costs by at least 10 per cent, the OFT believes.

Interserve, Kier, Balfour Beatty and Carillion are among the firms on the watchdog's statement of objections. The named firms - several of which are involved in multimillion pound private finance initiative deals with the NHS - can now submit evidence before the OFT decides whether they have breached competition law.

In a letter sent on Monday, NHS chief executive David Nicholson said no assumptions should be made that there had been an infringement of competition law.

The report follows an OFT investigation sparked by a 2004 probe into building contracts for the Queen's Medical Centre in Nottingham. The value of capital contracts investigated in the Nottingham case was around£30m. Nottingham University Hospitals trusts said it had since overhauled its systems for awarding contracts.

The Department of Health has asked the OFT to pass on information about any cases involving NHS building contracts. The NHS Counter Fraud Service will work with NHS Estates and the trusts concerned to discover whether the NHS has been affected by the practice.

A DH spokeswoman said: "If we have been a victim of malpractice or have money owing, then it's likely we would pursue it."

Construction Confederation chief executive Stephen Ratcliffe said the bid-rigging allegations applied only to single-stage competitive tendering and not more complex PFI deals.

He added that about 95 per cent of the cases were "cover pricing", where companies put in high estimates to ensure another wins, which did not actually lead to higher costs.

He also said there were risks in dropping firms. "If contractors are dropped, this will have a perverse effect in reducing competition."

Unison PFI spokeswoman Margie Jaffe said she feared contracts could be vulnerable to price fixing as there were a limited number of firms large enough to take on such big jobs and firms often subcontracted each other.

"The DH should review all PFI and LIFT contracts - certainly every single one involving one of the companies on the list."

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