Ministry undercuts bids, say contractors

Press, 31 July 1986, Page 7

Ministry undercuts bids, say contractors

negations of unfair competition from the Ministry of Works and Development will dominate the Contractors’ Federation national conference in Christchurch next week. The federation claims that in recent weeks the Ministry has begun tendering for outside jobs, and has unfairly undercut private blds. Examples include a railway overbridge near Hamilton, for which the Ministry successfully tendered $150,000. The engineer’s estimate and the next lowest private tender were about $200,000. In Dunedin, the Ministry put in the lowest tender for a roading contract for the Dunedin City Council, but the council has deferred a decision after an approach by local privatecontractors.

“We are not afraid of competition but it has to be fair competition,” said the chairman of the Canterbury branch of the Contractors’ Federation, Mr Brian Murray. However, contractors believed the Ministry was taking a loss on the contracts, which the taxpayer would eventually have to bear, he said. “They (the Ministry) have to get work, but they are putting us out of business,” said Mr Murray. The Ministry was able to undercut private contractors because of its infrastructure as a Government Department, according to the national president of the Contractors’ Federation, Mr Roger Douglas. As such, it paid no tax on its profits, he said. Mr Douglas believed that the Government’s

economic policy would also allow private contractors to tender for Government contracts, but that had not yet happened. He was sure the situation was "not what the Minister of Finance wants.” A contractors’ delegation to the Minister of Works and Development, Mr Colman, called for a moratorium on the Ministry tendering for outside work until a set of guidelines could be established. Mr Colman refused, but said that he would consider the matter before his opening speech to the federation’s conference on August 6. Mr Douglas said that the Minister had the message “loud and clear.” “He is in for a pretty torrid time if he does not come up with the right answers,” he said.