Thursday, 24 September 2009

The cost of cover pricing


Councils are quite right to ask questions about exactly how much money they were misled into spending during the cover pricing scandal.
If it turns out that they and other public bodies in Notts paid way over the odds for buildings and other construction schemes then the taxpayer has been well and truly ripped-off.
But if it's right to put these dubious tenders under the microscope then surely it's also right to ask why no one spotted what was going on.
The OFT investigation into East Midlands building firms was launched because an auditor at the Queen’s Medical Centre saw something which simply didn’t make sense.
The scale of the fines shows that this was a far from isolated example, and the word from people in the industry right from the start was that cover pricing had almost become custom and practice in public sector tendering.
Which suggests, among other things, that its existence was widely known.
When you put that together with the long list of contracts in which the OFT says cover pricing took place, you are left with one question.
Did no one else working for a council or health service ever wonder whether something funny was going on?
It wasn’t councils or the NHS that broke the rules. But they are in charge of the tendering process.
Parts of the construction industry took a wrecking ball to it. So is it still fit for purpose?