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Spending chief backs retentions

The retentions system is here to stay and the onus is on the industry to make it work, OGC chief executive tells conference delegates

THE RETENTIONS row erupted again at the Office of Government Commerce's Achieving Excellence conference, as chief executive Peter Gershon angrily refused to scrap the hated system.

Responding to complaints from specialist groups, Mr Gershon said: 'The position on retentions is perfectly clear. I will not abolish the symptoms rather than the cause and it is up to the construction industry to prove it can deliver projects without defects.'

Rudi Klein, chief executive of the Specialist Engineering Contractors' Group, said: 'I am concerned about this because there is no evidence that retentions have any impact on defects. We need to move this along as an industry and it would be useful for Government clients to assemble data on the subject.'

The OGC wants to save £3 billion through value for money efficiencies by March 2006 and have 70 per cent of all construction projects on time, on budget and defect-free. But the OGC made no commitment to remove retentions.

The organisation also unveiled targets to slash the average procurement time for major construction projects by 25 per cent and to reduce procurement times for other construction work by 15 per cent.

But Mr Gershon admitted that the OGC had no information for the average procurement time on Government construction projects.

He said: 'There is no firm information - these targets are based on anecdotal evidence.'

One senior industry attendee said: 'If there is no data on procurement time, then 25 per cent of what are we aiming for? How do you measure it? But you can guarantee they'll be giving themselves a tick in the box in two years' time to say they've done it.'

The OGC also claimed that 100 per cent of departments use teamworking or partnering 'as appropriate', and that 100 per cent 'use innovative procurement strategies based on the integration of the supply chain'.

But the Highways Agency's procurement director Steve Rowsell, who spoke at the conference, said: 'Clients are recognising the need for integrated teams, but we are not there yet.'

Mr Gershon called on contractors to highlight examples of bad practice in Government procurement. He said: 'If you see examples of lowest price procurement, there are mechanisms where you can draw this to our attention but, in the absence of evidence, this assertion is looking increasingly groundless.'

Michael Ankers, chief executive of the Construction Products Association, said:

'There is no way that 100 per cent of departments are using teamworking or partnering.

'Our members on the manufacturing and supply side are not seeing it, and we need the principles driven right down the supply chain.'