Mitie retracts supplier ''shortlist'' fees

8 December 2010
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8 December 2010 | Lindsay Clark

Services group Mitie has admitted procurement practices that included charging vendors £250 to be shortlisted to work for the firm.

It also admitted to an incident where some firms had been charged £10,000 to become preferred suppliers, although in both cases, the practice ended in April this year.

John Telling, Mitie’s group corporate affairs director confirmed the veracity of Daily Telegraph reports that said it charged suppliers £250 to join a short list on two national contracts. In an email to suppliers the firm said it had invested heavily in a procurement system. “The £250 is a small fee, recovering a small percentage of our costs and helps support the continued running and development of that process,” it said.

In a separate case, a message suggested vendors make a “one-off payment of £10,000 in order to become a preferred supplier”, emails seen by the Telegraph showed. The suppliers affected had previously worked for Dalkia Technical Facilities, which Mitie acquired for £130 million last year.

Telling said it was not justifiable to request such a payment and that if the money had been paid, it would be refunded.

Mitie, which holds cleaning and building services contracts with the UK government, is now conducting a review of its buying practices, although Telling would not go into detail when speaking to SM.

He was keen to stress that the two practices highlighted came well before the government’s current drive to renegotiate contracts with large suppliers including Mitie, lead by Cabinet Office minister Francis Maude.

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