New code to protect subcontractors

A new code of practice aimed at protecting subcontractors from abuses such as multiple-round tendering, bid peddling and Dutch auctioning was launched by the Construction Industry Board this week.

The new code sets out procedures to ensure fair and transparent dealing in the way the industry selects its subcontractors. The code is mostly based on competitive tendering, but also considers alternatives such as partnering, negotiation or joint venture arrangements.

The key principles include:

l Clear procedures which are fair and transparent to all parties;

l Tender lists which are as short as possible;

l Tender lists compiled following systematic qualification with conditions for all tenderers the same;

l Confidentiality to be respected by all parties;

l Sufficient time and information to allow the preparation of tenders;

l The use of suites of contracts and standard unamended contract forms where they are available;

l And a commitment to team work from all parties.

Chris Sneath, President of the Heating and Ventilating Contractors' Association - who chaired Working Group 3 which produced the report - pointed out that the code applied equally to the appointment of sub-subcontractors. He stressed the need for achieving conforming bids: "Tendering is one of the big problems facing the industry. Everyone is trying to find ways of getting around doing it properly. Too many projects that go out to tender are not properly planned and designed.

"Either they don't happen, have to be revised because they are over budget or have problems post-tender. If we get them right first time it will reduce overheads and help towards Latham's 30 per cent cost reduction target. For too many subcontractors 'value engineering' has come to mean Dutch auctioning."

The new code only covers best practice up to the appointment of the subcontractor and so does not cover questions of payment for example.

Don Ward, Chief Executive of the CIB said it was too early to say whether Government legislation or some form of industry applied sanctions against abusers would be needed to enforce the code. He added: "It will take six to 12 months for the industry as a whole to become aware of all the new codes and we need feedback as to how it is going".