Select Committee on Public Accounts Minutes of Evidence

Examination of Witnesses (Questions 240-246)



Jon Trickett

  240. One of the things which I always think about is the possibility of collusion between various people who ostensibly are not related to each other. I am interested in the MCG, the Major Contractors Group, because in questions which were posed earlier by Mr Davies we learned there are some financial barriers to bidding. The preparation of contract documents and tender documents can be a very expensive process and as a consequence many contractors are priced out of the market before they even get to stage one, as I understood Mr Busby's responses. As it turns out Mr Busby is also the Chairman of the Major Contractors Group, which is probably a comprehensive list of every contractor who can afford to get over the contract barriers you have just been describing. I just want to ask you, Mr Busby, in relation to the PFI do you and your colleagues discuss such practices as pricing and contingency funds for penalty clauses or any other matters which relate to agreements within the industry as to how you will approach contracts, tendering? These are supposed to be your competitors but, in fact, they turn out to be your colleagues.
  (Mr Busby) If you attended our meetings I do not think you would describe the process as sitting with colleagues.

  241. It sounds like the Labour Party. We are supposed to be comrades. I did ask you the specific question because I think we all fall out from time to time amongst friends, and even families fall out from time to time, but have you ever discussed any matters which could be regarded as—collusion is too strong a word—discussing industry's views as to how to tender?
  (Mr Busby) There has been absolutely no discussion at the level of individual contracts. There are one or two industry moves with regard to risk allocations and general points of contract that we do feel that it is appropriate to take forward as an industry. All of our meetings are minuted and we certainly do not break any of the competition rules.

  242. I do not think I asked you about specific contracts because probably that would be very close to fraud or something like that.
  (Mr Busby) Precisely so.

  243. Therefore, I did not ask you that question and I do not expect you to give me any answer other than the one you gave me.
  (Mr Busby) I did also add that we do take certain standard contract conditions up as an industry and take them up with certain people.

  244. Have you discussed tendering practices in the generality? It sounds as if the answer is yes to that.
  (Mr Busby) In the generality?

  245. In the generality.
  (Mr Busby) I am not sure I fully understand the question but I suppose the answer has to be that we have because we have taken up some things, like bid costs with Peter, as an industry.


  246. Thank you very much, gentlemen. We have just published a report on the Royal Armouries and we used some fairly strong language about how we felt that the public sector client was naive in their handling of this matter. That was the point Mr Steinberg was making very powerfully to you. We are talking about contracts committed to a sum of £100 billion, this is an important subject. We are very grateful to you, Mr Gershon, Mr Busby, Mr Ryan, for coming here this afternoon. I am afraid when you come back you will have to learn the mannerisms of a mandarin, that when we keep repeating questions to you you have got to assume that they are all very intelligent questions.
  (Mr Gershon) I will try harder next time.

  Chairman: Thank you.

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