Public sector methods are sinking companies says consultant - Cowboy clients fury

The survival of many construction companies is being threatened by "cowboy clients," according to the procurement director of contracts consultant James R Knowles.

Tony Clarke, a director with Knowles, claims that many public sector clients are deliberately operating weak procurement systems. The poor systems could ruin contractors and expose clients to unexpected criminal prosecution under the CDM regulations.

Clarke added that ignorant clients are also cowboys by default. "There are as many cowboy clients as cowboy builders, and it is not always through choice," he told CJ.

He warned that "not all clients listen to quality arguments" when trying to get lowest costs. However, the problem is leading to claims and major difficulties for local and bigger building contractors.

Cowboy clients also cause claims over design changes and contract variations, he said. The struggles can force subcontractors to accept financial losses instead of fighting expensive legal battles.

The call for contractors to fight back comes just after Sir Michael Latham blasted the former Tory Government on the eve of the General Election over its poor progress in reforming the industry.

Key parts of his proposed reforms are not expected to be enacted. He has now called for new measures, which include teaching "lay clients" about good procurement.

Clarke's claims throw a different light on the procurement wars between clients and the construction industry, which leads to calls for clampdowns on "cowboy builders."

The Construction Industry Council has recently called for such a move to deal with consumer protection and tax issues (CJ 7 May).

Clarke said that the procurement problem starts before the bidding stage as many public sector clients make procurement choices too early without proper investigations. The problem is made worse by consultants, which try to offload design and other checks onto under-resourced contractors.

The clients appear not to realise or care about the contractual or legal implications of their procurement systems, he said.

Clarke, who used to run his own contracting firm, warned that clients also could be exposed to prosecution under the CDM regulations if safety problems arise on schemes that they barely understand. He claims that may happen if clients push too much detailed preliminary work down the procurement chain.

The claims come as the Government tries to complete the Latham reforms that are meant to revolutionise relationships and efficiency in the construction industry.