Tony Bingham’s and Rudi Klein’s (9 October, page 32) articles on the OFT are linked and raise more questions than they answer
Bingham invents a scenario to suit his case that (in the eyes of the OFT) a simple phone call between two estimators creates collusion (that is, corrupt practice) between parties.
But suppose instead that the intention of Bingham’s invented phone call was more sinister than just to exchange cover prices? Suppose it led to a deal between all of the tenderers (on Bingham’s admission, they all know who is bidding for the job) to fix the price, who will get the job, and a back-hander to the unsuccessful bidders? Plainly, that would be fraud. The trouble is, that despite, or because of Bingham’s comedic style, we still do not know which contractors found guilty by the OFT played the innocuous card in seeking covers, and which were playing a darker game. Would Building now ask the OFT for a definitive statement separating the two, please? And, for those allegedly guilty of corruption, instead of offering leniency to those admitting corruption, should not the director of public prosecutions be charging them with fraud?
If cover pricing will not die, would it not be sensible if the OFT created a regulatory system that ensured the practice was not a cover for fraudulent intention?
Rudi Klein pursues a slightly different but equally questionable argument regarding cover pricing and competition. What escapes him is that for every purchaser who naively expects a bargain by blindly accepting the lowest price, even more building clients are not so stupid and satisfy themselves that the contractor they choose can also deliver the quality specified, and on time.
And I am not quite sure of the accuracy of his figure for the waste inherent in competitive bidding. In these days of emailed multi-bids, I imagine that an infinite number of bids would only be marginally more expensive than a single bid.