Procurement corruption remains a problem in construction. Edward Quigg explains the policies companies should have in place to guard against it.
The jailing of a contractor and developer for bribery earlier this year shows that corruption is alive and well in the construction industry – even though the UK is ranked as the 8th least corrupt countries in the world.
Procurement fraud is a criminal offence and is defined on the Action Fraud website as “any fraud relating to a company purchasing goods, services or commissioning construction projects from third parties.” It can occur at any point during the procurement and contract management processes and does not only take place in the construction industry. Procurement fraud includes price fixing, market sharing and bid rigging.
Procurement fraud could cost a construction business millions of pounds and damage its reputation. At the corporate level, it is incumbent to put in place procedures to prevent and identify a suspicious procurement fraud to minimise the costly consequence. So, what can a company do? Here are 11 key preventative actions:
Remember that there are many who might report suspicious activity. A bidder who lost out is likely to raise concerns, as is a colleague who is jealous of the new Jag in the staff car park and the luxury holidays, as happened with the former head of energy procurement at Kent County Council in 2012. If you do suspect fraud, it can be reported at www.actionfraud.police.uk.
This article first appeared in Construction Manager Magazine.
Original publication can be found here.
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