LONDON (AP) — Britain's competition regulator accused 112 construction companies yesterday of colluding on bids. A construction industry federation contended that the alleged violations did not result in extra costs for buildings.

The Office of Fair Trading said more than 40 of the firms had admitted price-fixing, and another 37 had applied for leniency. Businesses named in yesterday's announcement have 30 days to respond to the agency.

A key issue in the investigation is "cover pricing," in which some companies agree to submit artificially high bids that are not intended to win a contract.

"Cover pricing arrangements have previously been found by the OFT and the Competition Appeal Tribunal to be illegal and in breach of the Competition Act 1998 due to the restrictions on competition that arise," the agency said.

Stephen Ratcliffe, chief executive of the Construction Confederation, commented: "Let's be clear what we are dealing with in cover pricing — there was no intention to make a single penny at the tax-payers' expense, just an attempt by busy contractors not to win work without upsetting the client."

The confederation's statement added that "the simple act of putting in a high bid to avoid winning the work is not an infringement of competition law".

The OFT, however, said a minority of companies allegedly arranged compensation payments to unsuccessful bidders.

The agency said its investigation started in 2004 from a complaint from a health authority in the East Midlands region, and spread to other areas of England.

The agency said it carried out site visits to 57 firms.

It said none of the 112 firms named in the agency Statement of Objection had been found guilty of violating competition law at this stage. Any business found to be a member of a cartel could face fines up to 10 percent of its global revenue, the agency said.

"Cartel activity of the type alleged today harms the economy by distorting competition and keeping prices artificially high, said John Fingleton, chief executive of the Office of Fair Trading.

"This investigation, together with the OFT's previous decisions in the roofing sector, will hopefully send out a strong message to the construction industry about the seriousness with which we view suspected anticompetitive behaviour. Businesses have no excuses for not knowing and abiding by the law."

Balfour Beatty PLC, one of the 112 companies named by the agency, said in a statement to the London Stock Exchange that it had announced in June that it was reviewing its compliance with the Competition Act, and had since communicated the results to the agency.

"The company and its operating businesses have cooperated fully with the OFT in all aspects of its investigation," Balfour Beatty said.

Connaught PLC said in an announcement to the Stock Exchange that that it had been contacted by the Office of Fair Trading last year "in relation to a small number of tenders in one of its subsidiary companies dating back to 2000".

"The tenders represent a very small proportion of the bidding activity of the group during that period," Connaught said.

"The group has strict guidelines and controls in place relating to its tendering process to ensure full compliance with competition law, and is cooperating fully with the OFT."

Henry Boot PLC said its subsidiary, which was cited by the OFT, had cooperated fully "and Henry Boot PLC has applied for leniency".