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How can councils avoid being ripped off by construction contractors?

The Office of Fair Trading has fined 103 companies £129.5 million in fines for breaking competition rules. The scam is that a construction firm persuades a rival also to bid for the contract at an inflighted price - to create a misleading impression of competition. Sometimes the losing bidder would then be paid by the winning bidder - sums of up to £60,000 for their trouble. Of the winning bidder might return the favour by putting in an inflated bid for another contract.

Councils, as well as other parts of the public sector, are usually the people who fall for this. Private sector clients have the rigour instilled by spending their own money rather than someone else's. But councils don't do themselves any favours by restricting genuine competition by making the bidding process bureaucratic. Antonia Cox wrote on this site last week about the Decent Homes programme and the "poor performance by big-name contractors who take advantage of framework contracts to keep out competition from local firms and place themselves in a position where they can ignore residents’ complaints."

One of the housing papers I have says of building contractors that "the detailed assessment of equalities policies will also be carried out on the submission of tenders." This sort of requirement sometimes suits big firms as they can absorb the burden of bashing out an equalities policy to suit the Town Hall box tickers. Smaller firms can't.


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