‘No systematic corruption’ on Balfour Beatty contract

By Sandy Guthrie16 May 2014

No evidence of systematic bribery and corruption on a UK gas mains replacement contract has been found by UK contractor Balfour Beatty after a six-month investigation by the company, which added that it had not identified any improper conduct on the scale that had been alleged recently.

It admitted, however, that it had uncovered some evidence to suggest that payments totalling less than £1,000 (€1,200) may have been made before Balfour Beatty took over the contract, and some suggestions of localised bullying.

It was reported earlier this month that three middle managers had been suspended by Balfour Beatty while the investigation was undertaken into allegations of misconduct. The contract concerned is with National Grid, the private company that connects UK consumers to energy sources.

GMB, the union for energy workers, had written to National Grid with a series of questions about the investigation into allegations of bullying, misreporting, fraud and corruption in a gas distribution strategic partnership (GDSP) covering gas mains replacement work in England’s West Midlands.

At the conclusion of the Balfour Beatty-led investigation, the contractor said it could confirm that the inquiry had been sparked by an anonymous letter. This letter alleged individuals were receiving payments in return for giving work to subcontractors.

Balfour Beatty said that 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 – the UK’s Transfer of Undertakings (Protection of Employment) regulations.

The contractor said that it had concluded that the processes and controls used by Balfour Beatty and put in place meant 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 work.

It said, “These measures involve separation of the commercial and operational aspects of letting subcontracts, so the chance of individuals receiving payments for selection of subcontractors on the scale alleged is extremely unlikely.”

It added that it was able to confirm that there had been no financial loss to National Grid, customers or consumers.

Falsification of dates

However, it said it had found some evidence suggesting “that a small number of employees may have been involved in falsification of dates as to when work was done on track sheets”.

It said the falsification indicated that work had been 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 sub-contractor 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.”

It said that as a result of this process, there was 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.

Bullying

In addition, Balfour Beatty said there had been some evidence to suggest localised bullying.

It added that it took any allegations of this kind extremely seriously and that it was now considering its findings and its next steps.

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