Apollo undercutting rivals by 20%

Apollo has been underbidding its rivals on contracts in Scotland by nearly 20%, according to tender documents seen by Building.

This revelation comes amid a turbulent period for the firm, which recently discovered two former directors of FWA West (a firm it bought for £4.9m) are due in court facing charges of fraud.

It has now emerged that they will appear along with former chief of Ujima housing association, Kenneth Kerr (see below).

Talk of contractors under-bidding to secure work has been doing the rounds since the onset of the recession but these documents suggest the extent to which some firms may be going to secure work.

On a rendering job in Alexandria, West Dunbartonshire council awarded Apollo a contract for £383,475 in September 2010.

The figure is 19.6% lower than the second highest bidder respectively.

The Chartered Institute of Building (CIOB) classifies any bid 10% lower than the second largest as ’suspiciously low’, and says that “clients should not be seduced by the lowest bid”.

Apollo also won two other bids for West Dunbartonshire and East Lothian councils in 2009 with offers 15.7% and 12.8% lower than the second largest bidder.

In response, Apollo chief executive Dave Sheridan, said: “Apollo does not go for jobs as loss-leaders and the three Scottish contracts referred to are healthy.

“The difference between our price and that of the nearest rival for the contracts quoted is far from unusual.”

A recent CIOB survey found that 82% of respondents thought that so-called “suicide bidding” existed in the industry.