Balfour Beatty has found evidence of “localised bullying” on a National Grid contract it started last year, but says it found “no evidence” of systematic bribery and corruption.
The contractor suspended three employees after it started an investigation into allegations of improper conduct on its Gas Distribution Strategic Partnership covering gas mains replacement work in the West Midlands.
Balfour Beatty launched the investigation after it received an anonymous letter which alleged individuals were receiving payments in return for giving work to subcontractors.
The GMB union had also written to National Grid over the issue.
It said the letter referred to conduct which “allegedly began prior to Balfour Beatty taking over the contract in April 2013, when a number of existing employees were also transferred across to the new contract, through TUPE arrangements”.
Balfour Beatty said its investigation found “no evidence of systematic bribery and corruption on the contract” but found evidence to suggest payments totalling less than £1,000 may have been made before Balfour Beatty took over the contract.
The contractor said it would be “extremely difficult” for any employee working on the operational side of the business to exert “significant, improper influence on the choice of a subcontractor for the contract”.
Balfour Beatty said it had controls in place that separate commercial and operational aspects of awarding subcontracts, making it “extremely unlikely” that individuals could receive payments for the selection of subcontractors on the scale alleged in the letter.
The contractor said there had been no financial loss to National Grid, customers or consumers.
However, it did find evidence that some employees may have been involved in falsification of dates, as to when work was done on “track sheets”.
Balfour Beatty said: “The falsification indicated that work was done up to two days in advance.
“These track sheets are not used to invoice National Grid, our customer, but are an internal Balfour Beatty recording system used for subcontractor payment and work-forecasting purposes.
“This falsification led to no financial benefit to Balfour Beatty or to individuals, nor would it have influenced the choice of a subcontractor.
“The system used to invoice National Grid is entirely separate from the track sheet system and is audited by National Grid.
“As a result of this process, there is no chance of misreporting under the contract either to National Grid or then to the regulator, Ofgem, as a result of this track sheet manipulation.”
Balfour Beatty said it took the allegations “extremely seriously” and was now considering its next steps.
The contractor announced it had won two eight-year contracts under the Gas Distribution Strategic Partnership to cover the North-west and West Midlands in December 2012. The combined deals were worth £1.2bn and commenced in April 2013.
GMB and a National Grid spokeswoman have been contacted for comment.
More to follow.