Building Fraud

An article called Contrast was written by me the other day relating to the contrast of nature’s path compared to manmade projects. This involved building work under construction which was impeded and highlighted building fraud.

Building fraud typically involves deceiving others, often for financial gain, through misrepresentation or manipulation in construction-related activities. Here’s a general outline of how building fraud can work:

1. Bid Rigging: In competitive bidding processes for construction projects, contractors may collude to fix prices or allocate projects among themselves in advance. This deprives the client (often a government entity or large corporation) of competitive pricing and choice.

2. Substandard Materials: Using inferior materials than those specified in the contract is a common form of fraud. Contractors may substitute cheaper materials to cut costs while billing for higher-quality materials, compromising the integrity and longevity of the construction.

3. Overbilling: Contractors may submit invoices that overstate the amount of work performed or bill for work that was never completed. This can involve billing for phantom employees, inflated hours, or nonexistent materials.

4. Kickbacks and Bribes: Contractors or construction managers might receive kickbacks or bribes from subcontractors or suppliers in exchange for awarding them contracts or inflating their invoices. This inflates costs and compromises the fairness of the bidding process.

5. False Certifications: Contractors may falsely certify compliance with building codes, safety standards, or environmental regulations to avoid necessary costs or to secure approvals they would otherwise not receive.

6. Unperformed Work: Contractors might bill for work that was never actually performed, such as claiming completion of project milestones that have not been met or claiming overtime hours that were not worked.

7. Unlicensed Contractors: Operating without the necessary licenses or certifications required by law can also be a form of building fraud. This can involve misrepresenting qualifications or using unauthorized subcontractors.

8. Phantom Projects: In some cases, fraudulent contractors may create entirely fake construction projects or inflate the scope of a project to obtain funding or payments without ever intending to complete the work.

9. Manipulation of Change Orders: Change orders are legitimate modifications to the original contract, but they can be manipulated to increase project costs unnecessarily. Contractors might exploit change orders to inflate their profits.

10. Insurance Fraud: Falsifying insurance claims related to construction accidents, property damage, or worker injuries can also occur, leading to inflated premiums and costs passed on to consumers.

Building fraud undermines trust in the construction industry, wastes resources, and can compromise the safety and quality of buildings. Preventing fraud often requires robust oversight, transparent processes, and ethical behavior from all parties involved in construction projects.

Personally, I can’t get my head around why building fraud needs to occur in the first place. If people offer a reliable and efficient building construction service then clearly, they will gain trust and consequently deliver a high standard of work. It just goes to show that the world is held back from progress because of the few bad seeds in society who get a kick out of unscrupulous business practices.

Take care!

Prof. Carl Boniface

Vocabulary builder:

Impeded (v) = regular verb impede means obstructed, hindered, hampered, delayed, incumbered, encumbered, inhibited, blocked, slow down, hold back, get in the way, (ant) facilitated

Kickbacks (n) = bribes, softeners, inducements, payments, rewards, commissions, sweeteners, shares, cuts

Scope (n) = possibility, choice, room, opportunity, space, latitude, (ant) constraint

Get a kick out of (idiom) = to get enjoyment or pleasure. as in enjoy. to take pleasure in, “It's clear that people get a kick out of silly dog films.”