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Does government procurement need to be cured?

If there was something the government needed like a hole in the head, it was the words “conflict of interest” being mentioned in relation to the procurement of yet another infrastructure project of national significance. 

Today The Times claims to have exposed a potential “conflict of interest” surrounding a consultancy contract awarded by the government relating to the £18bn nuclear plant Hinkley Point C.  

The story revealed that the Department of Energy and Climate Change had contracted Jacobs-owned management consultancy firm Leigh Fisher to advise on a deal to award Hinkley’s owner EDF a £92.50 per MWh strike price for energy from the plant.

The award came despite Leigh Fisher declaring that its parent company, Jacobs, was providing engineering services and project and construction management resources for EDF at the time, documents obtained by The Times showed. 

A spokeswoman for Jacobs told The Times: “We believe that Leigh Fisher provided appropriate information to DECC concerning the fact that it is an affiliate of Jacobs Engineering UK. This affiliation is publicly known”.

No doubt the revelations will provide further headaches for those that oversee government procurement and bring their processes firmly under the spotlight. 

The fact the award came despite Leigh Fisher disclosing a number of potential conflicts of interest beforehand, according to The Times, makes the revelations all the more worrying.

It is the third major project to be embroiled in a procurement saga since the turn of the year.

Last month energy secretary Greg Clark terminated the £6.1bn Magnox decommissioning contract it awarded to Cavendish Fluor nine years early after a botched procurement process.

Last week saw HS2 chairman Sir David Higgins and transport secretary Chris Grayling field questions over potential conflicts of interest on two HS2 contracts.

Questions over conflicts of interest surrounding a firm that appears to have facilitated the awarding of the highly controversial Contract for Difference will further add to the scepticism surrounding government procurement.

There is no doubt that there is often a small pool to fish from when it comes to finding high-level expertise; this shrinks even further in the construction and engineering world.

As Sir David noted at the select committee hearing only last week, HS2 had scoured the entire planet in its search for a new chief executive before finding Mark Thurston on their doorstep.

But this means there needs to be even tighter scrutiny on potential conflicts of interest.

The responsibility for this should be shared between those bidding for the contract and the client running procurement, something that does not happen right now. 

Last Friday, HS2 announced it would be making moves to redress this balance, and take a bigger responsibility in vetting firms and monitoring potential conflicts.

This move should be welcomed, but whether other government clients will follow suit remains to be seen.

What we do know is that high-profile problems with procurement raise questions around major projects and a slowdown in delivery.

More robust safeguards at the start of procurement will help minimise these.

More than 40 per cent of the predicted £500bn infrastructure pipeline to be delivered by 2020 will come through the government.

Squeaky clean procurement processes are essential to this being delivered smoothly.

If there was a time to take a long hard look at its procurement processes, particularly when it comes to conflict of interest, this would surely be now.

In the news

Multiplex sees turnover rise by 67 per cent and headcount boom by 32 per cent in firm’s latest financial results.

Nearly 60 jobs go as 157-year-old Yorkshire builder falls into administration.

 

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