Birmingham City Hospital victim of building bids scandal

Sep 27 2009 by Alison Dayani, Sunday Mercury

“The Trust did not have any evidence of foul play but if that has changed, court action is something we will think about.”

Cover pricing is where one or more firms posts artificially high bids to allow a competitor to win the contract with a cheaper bid.

The OFT found 199 illegal tenders between 2000 and 2006 and six instances where money changed hands between firms, with the successful bidder paying “compensation” of up to £60,000 to colluding rivals.

Wolverhampton’s New Cross Hospital paid £603,000 for an 18-bed ward extension in 2003 when building firms Shaylor and Thomas Vale agreed higher than normal bids.

Meanwhile, a Telford Primary Care Trust spokesman said they were “awaiting notification” on how to proceed after it emerged Arthur M Griffiths and Thomas Vale acted illegally on a £671,000 contract for a new doctor’s surgery, pharmacy and dental clinic at New Medical Centre, Lawley, in 2001.

However, some of the largest contract infringements involved the education sector.

Wolverhampton University was conned over a new judo hall in 2003 with Sol and Gallfiord Try boosting the contract up to £4.2 million, while Speller-Metcalfe and Thomas Vale pushed a bid up to £3.5 million for a replacement primary school in Elbury Mount, Worcester, in 2005.

Thomas Vale was also involved with Interclass on a £1.1 million contract to build at Two Gates Primary School, Tamworth, in 2003, and again with Interclass, Pearce and a Balfour Beatty subsidiary for a £1 million refurbishment on Wattville Thomas Junior and Infants School, in Handsworth in 2001.

Even the police were targeted over a £3.3 million extension to Sutton Coldfield Police Station in 2004 by firms Thomas Vale and William Sapcote.

Fines

Balfour Beatty/Mansell, handed one of the largest fines of £5.2 million for its part in a total of 30 incidents of bid-rigging, is the main contractor behind Birmingham’s new superhospital, in Edgbaston.

Balfour Beatty’s healthcare concession company Consort Healthcare is also the partner in the hospital’s Private Finance Initiative deal, which will see NHS bosses pay back £1.75 billion over 35 years.

Gareth Duggan, spokesman for the new Queen Elizabeth Birmingham Hospital, said the Trust was confident there had been no illegal activity over the superhospital contract.

“The Trust is aware of the recent decision by the Office of Fair Trading and it has not identified any breaches of the Competition Act by Balfour Beatty in relation to the construction of the Queen Elizabeth Hospital or any other Trust projects,” said Mr Duggan.

“The Trust has been assured that the conduct of Balfour Beatty and its subsidiaries has been professional, transparent and sincere in relation to this project.”