I’d like to bring your attention to Chris Blythe’s comment in the May issue of Construction Manager and how this contrasts with Bob’s World on page 58.

Let’s be clear what we are dealing with in cover pricing – in this case there was no intention to make a single penny at the tax payers’ expense, just an attempt by busy contractors not to win work without upsetting the client.

Cover pricing was symptomatic of a time when work was won on lowest price and short-term relationships were the norm. Culture in the industry has since shifted significantly and single-stage competitive tendering based on lowest price is declining.

In recent years, the industry has gone to great lengths to stamp out the practice. For example, companies are already ensuring that employees understand requirements for compliance and have written to all staff establishing protocols.

Because the OFT fines system is based on turnover, there is a concern that fines will be disproportionate in an industry which has high turnovers and relatively small profit margins. Another concern is over suggestions that public sector procurers may exclude firms accused of cover pricing from future tender lists.

Not only would this be an additional and disproportionate punishment, it would actually reduce competition and so potentially have an adverse effect on both client and contractor.

It is disappointing that our chief executive is not taking more time to understand what previously went on in the real world and why. The CIOB should be representing the building industry at all levels, which can only be done by having an in-depth knowledge, before offering cavalier and damaging statements.

Ian Lawson FCIOB

Source

Construction Manager