One of the most high profile construction industry stories currently is the Office of Fair Trading (OFT) investigation into bid-rigging activities, with Carillion and Balfour Beatty among over 100 companies that have been accused of breaking the UK competition law.
Threatened with fines of up to 10% of their annual turnover, which stands at £7.5 billion for Balfour Beatty, these organisations will have to defend the allegations or face the serious consequences of being found guilty. Whether or not the maximum fines are imposed, a severe impact will be felt by the whole of the construction industry if the allegations are found to be true.
Similar investigations are also being carried out by the OFT into alleged breach of competition law by a number of recruitment agencies, including Hays, Anders Elite and Eden Brown, who all provide recruitment services to the construction industry.
The investigation was first announced in 2006 but since then it has all seemingly, or at least publicly, gone quiet. NES, as well as many of our clients, are particularly keen to see the outcome of this investigation. Again, heavy penalties are likely to be imposed on the organisations that are found guilty.
With the construction industry broadly suffering from a nationwide skills shortage and companies already facing fierce competition for suitably qualified personnel, anti-competitive behaviour by agencies doesn’t just affect the reputation of the recruitment industry, it will also impact upon the wider construction industry, adding to the pressures that companies face to fill vacancies.
Whatever the outcome from these OFT investigations, lessons can still be learnt by everyone involved. Strict adherence to the law is crucial, not only to avoid large fines, but also to retain the professional reputations that companies work hard to achieve, often over many years.
Elsewhere within the industry, further lessons can be learnt by looking at Heathrow Terminal 5, where, although infrastructure-wise, the work went to schedule and was completed on time, underestimating the time required for systems testing meant that, when problems occurred with the baggage handling systems following the opening of the terminal to passengers, the resulting chaos was inevitable.
It’s not all doom, gloom and OFT investigations though! NES has appointed a new MD to it’s rail business – Andy Rowlands – who will be well placed to leverage the international scope of the organisation in order to support and service the wide range of rail infrastructure clients and projects being worked upon.
And finally, with the 2012 Olympics work well under way, Architects Stanton Williams have been appointed for the design work for Eton Manor, where a number of permanent and temporary buildings to host events such as gymnastics and Paralympics tennis and archery will be constructed.
Sarah Taylor,
Associate Director, NES UK
This article was written for NES Infrastructure & the Built Environment issue 9, 2008
