Today’s issue of the satirical magazine Private Eye carries a report on the Peverel / Cirrus price fixing scandal, which is the subject of an Office of Fair Trading investigation.
Peverel is co-operating with the inquiry and has been granted “leniency” from court action as a result. The OFT says Peverel turned itself in in December 2009, although Campaign against retirement leasehold exploitation supporters had alerted several authorities to the scam before this date.
Three Campaign against retirement leasehold exploitation whistleblowers, who co-operated with the OFT and were repeatedly urged to keep the investigation confidential, feel utterly suckered by the OFT leniency deal, which only became public knowledge in July.
Although the OFT claims that Peverel turned itself in in December 2009, the leisurely inquiry only began in April 2011, after Peverel was pitched into administration. The inquiry is confined to the years 2005-2009.
The OFT’s full report is expected in weeks. The issues are covered extensively on this site.
Private Eye is an influential publication, closely read by Westminster and media insiders.
Related posts:
Guardian examines the Peverel / Cirrus price-fixing scandal tomorrow
OFT will report on the Peverel / Cirrus price-fixing scandal on Friday
Campaign against retirement leasehold exploitation meets lawyers over Peverel price-fixing scandal
Peverel showed no ‘leniency’ for elderly leaseholders, so why should OFT? The Oldie reports price-fixing scandal …
COLUDING COMPETETIVE TENDERING?
Cirrus and Glyn Jackson were involved in our development when we had our Warden Call System replaced in 2008/09.
With Price Fixing in general one company colludes with another company and fixes a tender bid which the other contractor knows. They can between them, decide who will bid the highest and therefore who will win the contract.
The two companies Cirrus and Glyn Jackson tendered for our warden Call System when it was replaced. Cirrus bid over £20,000 and Glyn Jacksons bid was over £25,000.
The large difference in tenders gives the impression that the lowest is a bargain. The Contractors involved in Tender Fixing can add as much as 200 to 300% to the cost and we would never know?
Each resident paid over £700.00 each for the new Warden System, which should have cost no more than
£6,500 which would have been approx. £224.00 each.
When will we be informed WHICH DEVELOPMENTS were involved as by 2008 the Tender Rigging/Price Fixing had been going on for 3 years by then. Who were the Peverel/Cirrus/Glyn Jackson persons involved, I have asked for the contract details from Peverel Retirement who have refused to allow us to have copies of the contact that was awarded to Cirrus Communications?
Chas,
There has not been an infringement order yet. The OFT has to make a ruling, but we are assured all sites that may have been scammed will be listed.
I would send your information to the OFT inquiry head:
Cavendish Elithorn
S
Chas,
Of what benefit is it to the other companies involved in the price fixing if they know hey will not get the contract?
So either they have been awarded subsequent contracts at other developments having been encouraged to bid high, knowing they had “won” those contracts or Cirrus paid them to collude.
If the former, that means every contract involving the other companies (even without a Cirrus bid) should come under scrutiny. If the latter, how were the payments accounted for?
Michael
It is believed that the loosing contractor had been possibly seen as the Main Sub Contractor, where
Cirrus could have provided T Shirts with Cirrus name on and undertook the work.
This has been common in the Construction Industry were most Tenders are at least 3 companies and only one can be a sister company and Local Authorities up to 5 Tenderers, to reduce Price Fixing.
Cirrus could afford to pay the looser as they had hiked the tender bids by as much as Allegedly 300% so they could afford to pay say £10,000 for a contract worth £7,000 pounds and still made £10,000 profit without a Cirrus Operator on Site, is this a possibility????
Another aspect of this sorry saga that has not yet been mentioned is whether the replacement work was actually necessary and, if so, could it have been done at lower cost?
I know a bit about replacement emergency call systems. Provided the wiring is in good order and there are enough “ways” (i.e. small cables within the wiring loop) it is usually a question of replacing the peripheral equipment – speech modules, pull cords, smoke detectors and the main control/circuit boards. Very rarely in my experience is it necessary to replace the wiring.
However, unscrupulous contractors will often quote for replacement wiring to bump up the cost and then use the old wiring. Given than no one was checking the work of Cirrus, this is a distinct possibility. And who put the tender document and specification together – well Peverel!
In my view this investigation needs to be extended to cover the documents Peverel used when they went out to tender, plus a copy of any condition survey of the equipment prior to replacement.
There is no doubt there was a distinct “softening up process” in all this. Residents were told at budget and accounts meetings their system was old and “did not meet the latest standards” and that spares were difficult to obtain. This was followed by a sales talk form Cirrus saying how wonderful their equipment is. Then the so called consultation period. And finally the bogus tenders. And elderly residents, being in the main very trusting, took it all in!
In my view Peverel should be made to pay back all the costs, not just any excess, unless there is actual hard evidence the system needed replacing.
Insider,
We had the Peverel Sell in 2006/07 that our Warden System was now obsolete and this is exactly as you had previously stated would happen, in 2006/07 our development hit the dreaded 20 years the time the Peverel Machine began the OBSOLETE WARDEN CALL SYSTEM SPEIL.
Why would any flat in a development have to pay over £700.00 each for an emergency call system.
What is it WITHIN THE SYSTEM that costs so much, were/are Cirrus in league with BT.
We have the system that allows each flat to contact each other and we were informed by our Area Manager that it was free.
We were not informed that we paid a monthly line charge of £12.00 = £144.00 a year and an insurance of £3.50 = £42.00 a year a total of £186.00.
The main line from BT to operate the system is through the House Managers Residents ( say no more) and we pay £26.50 a month = £318.00 a year for a system that we no longer use as the House Manager was sacked for misappropriating the Telephone Costs, IRONIC I BELIEVE.
We have now paid £51.00 a month for the last 12 months for a system that no longer reports firstly to our sacked House Manager.
We have been TOLD by our Area Manager that we have to pay £612.00 a year for an Emergency System that no longer includes the House Managers 37 hours contact.
We also pay
£965.80 for monitoring
£627.84 for Door Entry & Emergency Call System
So as we only have 28 resident flats, where they are in 3 separate terrace blocks, and only a ground floor and first floor.
We are paying £2,205.64 a year for an office phone in the House Managers House (not been used) and Emergency Call Warden Call to Careline.
The initial cost of each flat was over £700.00 for the installation costs by Cirrus Communications (who were part of the Cartel Type Price Fixing/Tender Rigging) alone, who has been taking advantage, we know:-
Peverel Retirement Division benefits
Peverel Management Services Ltd benefits
Peverel Services Ltd benefits
Cirrus Communications benefits
Careline UK benefits
Kingsborough Insurance benefits
Oval Brokering Services Ltd benefits
The owner of Peverel benefits.
We The Residents pay for their Benefits, us old Dribbling Geriatrics pay.!!!!!!
Insider
Are you prepared to visit developments and provide survey reports that can be used.
Our development is 30 years of age and were updated in 2003?
James, I am not sure what you hope to do with the survey report but count me in.
Everyone
It should be remembered that peverel probably take a percentage of ALL costs from electricity to cleaning to gardening as well anything else one can think of.
Its probably done by “settlement discount” or some other quite legal arrangement … check your lease and deeds and see what is says.
ours says “reimbursement of cost” and in this context “cost” means “net cost” that is the net settled cost . in scotland that is established law, and the leading case was i believe in aberdeen in the late 1890’s.
“factoring” [as it is called in scotland] and its related scams have been around for many years …
what is different is the scale of the “additional revenue generation”
happy days