Damage Limitation

5 November 2009
It was difficult to miss the Office of Fair Trading’s (OFT) announcement on 22 September that 103 of 112 construction companies listed in its investigation into anti-competitive behaviour would share fines of £129.5 million. The mainstream media lapped up the bad news/cowboy builder’s story. A parade of press releases was issued from the construction companies picking up fines to explain how they became involved and outlining the lessons learnt from the inquiry. Hand-wringing SOAPBOX followed from trade organisations setting out the damage the investigation had done to the reputation of the industry. As the dust begins to settle it is only now that construction procurement practitioners can understand the implications of the investigation. Public sector practitioners who have been overwhelmed by ambulance chasing lawyers promising “no win, no fee” services in pursuit of legal actions against contractors falling foul of the inquiry will now have had time to reflect. They will be wrestling with the dichotomy of the OFT/Office of Government Commerce guidance on the Public Contracts Regulations 2006, which would indicate that contractors that were fined have committed an act of grave misconduct leaving them ineligible for selection. But the investigation was not representative of the whole construction sector. A total of 112 companies were listed in the OFT’s Statements of Objection in April 2008. Depending on which data you use there are around 200,000 contractors in the UK construction industry. The inquiry grew out of investigations in Nottingham. What would the outcome have been if the OFT had headed for the construction hotbed of London instead of to the outer reaches of Yorkshire and the Humber? One shudders to think. It is time that industry asked itself honest questions about the salesmanship and double-digit opportunism that has pervaded it in the past six to eight years. It can be difficult sometimes to pick out in tenders what the contractor has actually built recently, because it’s overshadowed by its efforts to save the planet and find a solution to world hunger. I come from a long line of family employed by the construction sector, and the impact of this investigation on the industry saddens me. The UK construction sector, which represents 8 per cent of GDP, struggles to get any direct government attention apart from when it becomes entangled with some other departmental programme. It is one of the UK’s biggest employers and best exports. Just look at the world’s most complex projects and you are certain to find a leading engineer, architect or project manager from the UK. I hope the sector can move on from this sad chapter. I am optimistic that, through open dialogue with the entire construction supply chain, the OFT’s investigation will draw a line under the opportunism that has recently manifested itself and provide a basis for honest and sustainable relationships. Lee Parkinson is director of Parkinson Procurement Solutions Limited
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