A lot has been said and written recently about the OFT investigation into price fixing. I am amazed that despite the amount of press coverage on this I can find no comment on the profit margins of the contractors involved.
If cheating and price fixing is going on as extensively as the OFT and press would have us believe then why are none of these companies showing more than a 2% or 3% profit margin? Are we to believe that everyone in the construction industry is so arithmetically challenged that they cannot add a decent margin to a fixed price?
I am also surprised that the clients escape comment in all of this. If a contractor is asked to price a contract and returns the tender to the client without pricing it they are often rung by the client urging them to submit a price. Indeed on occasions it is the client that gives the contractor a cover price so that they can demonstrate that they have received four or five tenders. Public sector clients may even go a stage further and compel the contractor to submit a price or threaten them with exclusion from future tender lists.