Fri 23 May 2008
OFT allegations ignore bidding costs
The OFT’s allegations of bid rigging against 112 construction firms have failed to take into account the high costs incurred by construction companies during the process of bidding for work in the public sector, says top construction lawyer Giles Dixon.The OFT accused 112 firms, including Balfour Beatty, Carillion and Kier, of conspiring to swindle taxpayers in a bid-rigging scandal worth hundreds of millions of pounds on April 17.
However, says specialist construction lawyer Giles Dixon (pictured), the report has failed to take the government’s own recommendations into account. “The situation is not as black and white as the OFT’s press release would suggest. Contractors that are on tender lists, or part of a framework, need to demonstrate a willingness to bid for work when they’re invited to do so. But with the public sector building boom in recent years, this has resulted in busy construction firms who have got contracts they didn’t want to win as they didn’t want to be seen to be turning down work.
“The OFT has not addressed the cost of bidding. In 1994, a recommendation in the Latham Report was that the government should pay compensation to unsuccessful bidders – but that has not been taken up. Government clients should pay bidders compensation for such costs incurred. Indeed, it might be argued that they should pay the full bid costs – after all, it was they who asked more than one firm to submit a price, and complying with that request costs money.”
Posted by Natalia Gameson
in Balfour Beatty, Carillion, Giles Dixon, Kier, News, Office of Fair Trading on Fri 23 May 2008
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