More allegations of National Highways’ inability to investigate those they appoint to maintain the Strategic Road Network (SRN) have emerged – read more at Construction Enquirer. A litany of issues have been reported, the Authority seemingly unable to adduce evidence to support them, for example:
- Purposely over applying for payments in the hope costs that suppliers are not entitled to will “go through” unnoticed or missed by checks.
In Area 9, claims under £25,000 go unchecked (statement source). National Highways believe it is ‘too expensive’ to audit prepayment. Too expensive not too! In reality, it is insurers undertaking the checks, discovering anomalies, overstatement … which it appears the Authority either cannot or will not ask their contractor to reimburse.
- Cost for ‘ghost’ employees and plant being applied for at either the subcontract or main contract level
Multiple contractor vehicle registration marks of vehicles found to be other than plant – some contractors now redact the VRMs from claim correspondence or supply less information – ‘false VRMs‘
- Discrepancies between the direct fee percentage stated in the draft contract and fee applied within applications for payment
Kier Highways’ contract non-compliance between 2014 and 2020 was reported to National Highways who failed to address the issues. For example, the Authority did not apply the agreed uplift percentage to claims against Third Parties (drivers, fleets, hauliers or their insurers) but used their own profiteering process.
Employing KPMG to audit Kier in 2017, National Highways sat on the findings which, according to Kier (statement para. 33):
The Draft KPMG Report contains, what I believe we have demonstrated to be wholly incorrect, opinions that, if taken out of the context of Kier’s rebuttals supported by detailed information and evidence, would support the allegation that Kier was inflating its costs when making Green Claims to recover more than it had actually incurred. Clearly this has the potential to damage the reputation of Kier which would harm its commercial interests significantly.
National Highways failed to act upon the report, kept it secret. This, despite clear evidence Kier was not only profiteering from claims against those unfortunate enough to be involved in incidents but providing the Authority with false cost/recovery information and adding uplifts they did not incur – Kier claimed their operatives worked 8am to 5pm after which they were paid a 50% uplift – hence Kier charged TP’s this. But the operatives worked shifts and even overtime was at a flat rate. Fraud by false representation?
And what of the discrepancy between the TP claims overhead percentage contractually agreed and the uplifts charged? In Area 9, Kier was to charge a 25.29% uplift on cost for the life of the contract. However, from the off, Kier ignored the agreement, National Highways kept the process secret (from TP’s) and enabled drivers fleets, hauliers and their insurers to be overcharged.
At a 2022 Information Tribunal, Kier confirmed our understanding of the contract’s operation but claimed they had complied with it. They had not, from its commencement 01/07/2014.
- Potential for suppliers or individuals within suppliers colluding with labour suppliers when agreeing rates or supply
Use of specific, sole suppliers creates a suspicion there are rebates paid. With regard to temporary Vehicle Restraint Systems (VRS) extended, unnecessarily long periods of hire suggest profiteering.
- Staff costs and timesheets; irregularities or lack of supporting evidence (potential claims of false records)
Repeatedly found on claims for recovery of damage-repair costs, some contractors’ reaction has been to withhold the records.
Where images were found to have been tampered with, National Highways appear to believe this is a complicated process that neither they nor their contractor could undertake! The alteration involved a simple crop to hide the photo’s date – likely to enable the contractor to submit multiple charges for the same works, as though repairs occurred on differing days – ‘altered images‘. The Authority’s superficial ‘investigation’ suggests a desire to ignore the obvious impropriety, bury the conduct.
- Significant changes to scope to that tendered post-award
National Highways appear so compromised as to be ineffective; unable to control their contractors.
- Favouring certain suppliers (potential bribery)
By 2020, Kier’s profiteering practice appears to have been unsustainable. National Highways could simply have advised Kier to comply with the contract, specifically with the public-protective section (Appendix A to Annex 23). Instead, the Authority changed the contract to assist Kier to bill drivers, fleets, hauliers or their insurers more – removing the public’s protection. National Highways continue to be charged by the original methodology.
It has been reported Kier Highways was associated with bribery
Separate papers also show that workers employed by the main contractor, Kier, for another scheme ‘manipulated’ tender processes, awarded a subcontract worth £1.4 million in breach of rules and that this was ‘influenced by bribery’.The claims were in relation to a stretch of the M6, junctions 13 to 15, also being converted. (Daily Mail 01/2022)
The internal National Highways papers state: ‘Evidence found during this investigation supports the allegations made but is insufficient to identify individuals.’
Yet, ‘to date, National Highways said that no evidence has been substantiated of the law being broken’ – on the one hand, the Authority has evidence of bribery, on the other, there is no evidence of the law being broken! It is an offence to bribe, another to be bribed.
It does not appear National Highways are capable of undertaking investigations. Tasked with investigating our concerns, their Legal Department has failed to address multiple issues.
Further reading – Fraud Clampdown After £320,000 Of Central Barrier Goes Missing During Construction Of Smart Motorway – The Sunday Times Driving