08 May 2008 | Jake Kanter
Public sector buying must be reformed to help stamp out cartels, according to the former construction minister.
Nigel Griffiths, Labour MP for South Edinburgh, said he was concerned that public sector purchasers were not using up to date procurement practices, leaving them vulnerable to bid-rigging activity.
Griffiths told SM: "Some people are stuck in the past and there needs to a dissemination of best practice tendering processes."
The construction procurement process is more costly and bureaucratic in the UK than in Europe, he said. The MP advised buyers to adopt "state of the art" techniques such as framework agreements, or two-step tendering a process where contractors can show interest in a project before putting in a formal bid.
Last month the Office of Fair Trading (OFT) accused 112 construction firms of colluding to fix prices when bidding on public contracts (News, 24 April).
Griffiths would like to bring key players together, including the OFT, to "thrash out" new tender procedures.
Following the allegations, NHS chief executive David Nicholson sent a letter to finance directors advising them to report suspicious activity and heed the OFT's advice on competition.
A spokeswoman for the Highways Agency also confirmed a small number of its suppliers are on the OFT list and that it "may" contact them about the issue.
Jeremy Swain, senior associate at law firm Denton Wilde Sapte, said that public sector buyers have a lot of guidance on good procurement methods, but more could be done to simplify bidding processes.
"Public sector documents are cumbersome to design and are not always clear to follow, but work is being done to improve them."
He suggested the understanding of best practice tendering techniques might differ between government departments.
"Smaller public bodies may only have one or two buyers and it is difficult for them to be clued-up and innovative when purchasing. Guidance such as the OFT and OGC's Making competition work for you is useful for spotting collusive activity, but there is no magic bullet."
Swain believes there will be more investigations in the future, bringing increased scrutiny on public spending.