Sunday, April 20, 2008

Protection against construction industry fraud

This is unbelievable:

Construction cartel 'may have cost taxpayer £300 million'
Taxpayers may have lost more than £300 million pounds through alleged bid-rigging to build schools, hospitals and universities by some of the country’s biggest construction firms it has emerged.

Balfour Beatty is among the 112 companies accused of bid-rigging
In one of the biggest investigations ever carried out by the Office of Fair Trading (OFT), investigators outlined 240 alleged cases in contracts totalling more than £3 billion.

Watt Tyler on Burning our Money provides his usual forensic analysis of the problem:
The only real surprise over all those contractors rigging their bids for public sector work is that anyone should be surprised. The construction industry has never been famed for fastidious business practices, which is why sensible informed buyers always take a great deal of care to ensure they're not being ripped off. Caveat emptor, my son, caveat emptor.

Quite. But what is really galling is that it isn't difficult to protect yourself against this type of fraud. We commission building work, admittedly not on this scale, but in the order of 10's of '0000's per project. To protect ourselves we employ a consulting company that has all market rates for construction work, including the latest prices of all work, equipment and goods, down to individual nuts and bolts. It costs us a few hundred pounds at most.

By all means lets throw the book at those who who have benefited from any fraud that is proved, but at the same time lets not forget those whose gross negligence allowed it to happen.

No comments: