OFT Anti-Competitive Behaviour

Institute of Commissioning Professionals (IoCP) Response 

This morning, we anticipate that the OFT will announce a range of measures as a result of the Inquiry into Cover Pricing in the Construction Sector.

So what can public servants and other professionals do to prevent reoccurrences? So far, groups such as Constructing Excellence, Building Magazine, Construction News and APSE are working on codes of practice, assurance schemes and in rebuilding industry confidence.

For commissioning and procurement officers, this can be tackled at a number of levels. The first is in encouraging bidders to describe their Anti-Competitive compliance policies and Ethical Codes in prequalification questionnaires.

The second relies upon better contestability data and examination of bid patterns. In turn, that will require the use of skilled and experienced professionals who are market aware. It will also require a degree of data sharing which is not impossible. Again, it will be confused by the movement towards whole life costing and ‘green’ construction.

On a more general basis, public servants perhaps should be asking if any inherent anti-competitive weaknesses have been developed by the use of eProcurement Systems and framework agreements?

Given the size of the reputational and financial risks, suppliers require to make all staff aware of anti-competitive behaviour, review policies and staff handbooks, nominate a responsible director, establish a point of contact where staff can discuss concerns, impress the individual’s personal responsibilities and the risks for the firm. In particular staff should be given guidelines on commercial confidentiality particularly at social events.

Indeed, given the government’s wish to involve the Third Sector in partnerships and consortia, that sector will require to take some of these lessons onboard quickly.

Sir John Egan has recently been reported as saying that one of the causes has been the tendency of government to use lowest price evaluation methods rather than Most Economically Advantageous Tender which includes quality and price. However, without any EU definition of MEAT, then maybe the issue can be traced back to the EU. Therefore, we now have to ask if it is time to work on the development of Outcome Based Tender Evaluation practice which will be designed to make a difference?

The IOCP is keen to help develop these techniques and policies and act as a source of robust contestability data and initiate a Summit to develop a partnership approach to the issue.

In the end, it is always during a boom when malpractice is more likely to emerge. With the recession, scarcer work streams should lead to sharper pencils, firms going the extra mile and developing true competitive advantage. From procurers and their advisers, perhaps there will be more concentration on contestability, environmental and sustainability issues, whole life and unit costs, anticompetitiveness and ethics.


Doug Forbes
Director
Institute of Commissioning Professionals
88 Windsor Court
Chase Side
London N14 5HS
Tel: 020 8886 2462
Email: Doug.Forbes@commissioning.org.uk
Website: www.iocp.co.uk
Email: anat.arkin@cipfa.org