ComCom to tackle dodgy bids in construction sector

Cover pricing, which involves collusion among builders to come up with believable but false bids for jobs to favour a particular company, falls foul of the Commerce Act, the regulator said. The research was initiated to test the sector's knowledge of competition provisions.

"Our research indicates a low level of understanding of competition issues by those in the construction sector," said Kate Morrison, general manager of enforcement.

"In particular, the research indicates that a practice known as cover pricing is occurring."

The announcement comes a little over a month after a 7.1 magnitude earthquake devastated the Canterbury region, and caused $2 billion worth of damage to non-residential property, though the research was completed before the September 4 disaster.