We’d like you to rewrite the rules for the way construction does business. Building has launched the Rebuilding Trust campaign to show that, in the wake of the OFT bid-rigging inquiry, the industry will no longer turn a blind eye to anti-competitive behaviour.
But we need your advice. We want to know what you think an industry-wide code of practice should include. Read on to find out how it could work, who has already pledged their support and how you can sign up.
So how might this code of conduct take shape?
Construction lawyer Christopher Hill starts the ball rolling …
The immediate challenge in the Rebuilding Trust campaign is to draft a code capable of restoring clients’ confidence in the integrity of the tendering process.
For the code to have effect, clients’ tendering criteria will need to favour bids from signatories to the code. They, in turn, will need to demonstrate compliance with the code and its anti-corruption or ethical policies.
If the industry is serious about promoting an ethical construction industry, adopting a voluntary code to combat anti-competitive activity would be a highly visible way of demonstrating its commitment.
The code could incorporate the following commitments by signatories:
• To self-certify that the tenderer has not collaborated with other bidders
• To provide the tenderer’s anti-corruption or ethics policy when submitting tender documents
• To sign documentation that includes warranties and undertakings by the tenderer that it has not engaged in anti-competitive practices
• To accept contract terms that provide for termination and compensation in the event of the breach of such warranties and undertakings
• To ensure that staff (at all levels) are aware of the company’s anti-corruption or ethics policy and are trained to recognise anti-competitive practices.
Since the key objective of a voluntary code would be to establish a culture of trust and transparency by tenderers, a fundamental principle of the code should be the signatory’s commitment to act with absolute integrity and not to engage in any deceptive activity during the tendering process.
But what is deceptive activity? A survey by the Chartered Institute of Building in 2006 revealed alarming misconceptions within the construction industry as to what types of activities were fraudulent. The code should address this issue by setting out clear definitions and examples of unacceptable activity.
Taking “cover pricing” as an example, it is clear that submitting an artificially high bid for a tender is not, in itself, illegal. However, a brief conversation between two bidders to establish a cover price (that is, a price high enough to ensure that a tenderer will not win) is illegal: it is anti-competitive because it distorts competition. The code should define cover pricing as an example of activity which cannot, in any circumstance, be justified.
Write down what you think should be in the code - or just sign up to support the idea of a code - then return this page to:
245 Blackfriars Road
London SE1 9UY
or fax it to us on 020-7560 4004. Don't forget to add your name, job title and the company you work for. At this stage we are only asking you to sign up to support the idea of a code. Your name and/or your company's name will not be associated with what may eventually be written in the code itself.
What our backers are saying
"This is a great initiative for construction to get behind and we shall certainly be supporting it."
Brian Berry, Federation of Master Builders
"The vast majority play by the rules, so we need to regain public confidence in the industry, which as we all know is such an important part of the UK’s economy."
Simon Storer, Construction Products Association
"The industry needs to state loudly that its house is in order, so Building’s initiative is to be applauded."
Stephen Ratcliffe, Construction Confederation
Christopher Hill is a partner in, and head of construction and engineering at, Norton Rose
Original print headline 'Let's start again'