Examination of Witnesses (Questions 240-246)
MR PETER
GERSHON CBE, MR
PETER RYAN,
AND MR
COLIN BUSBY
WEDNESDAY 12 DECEMBER 2001
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.
Chairman
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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