Quantity/quality: Analyse evidence

Having taken the steps listed in the previous pages, you now need to analyse the evidence that you have uncovered.

If the visual inspection and/or test results establish that the road was not constructed in accordance with the contract requirements (apart from in minor respects within the contract tolerance), and yet the contractor has claimed payment as if the works were in accordance with the contract requirements, then it has been established as a question of fact that the contractor’s payment claim is false.

The question then arises as to whether the provision of incorrect quantity and quality, and submission of false payment claim, was due to negligent, reckless or deliberate act by the contractor.

• Negligent:  The contractor honestly believed that the road was in accordance with the contract requirements, but negligently provided work which was below the contract requirements, and did not realise that.  It therefore submitted the payment application for full payment in accordance with the contract without realising that the application was incorrect.
• Reckless:  The contractor did not care whether or not the road was in accordance with the contract requirements, and provided the works without checking, and applied for payment without caring about the accuracy of the payment documents.
• Deliberate:  The contractor deliberately provided works which were below the contract requirements with a view to making an additional profit, and deliberately submitted an incorrect payment application.  Or, the contractor negligently provided incorrect works, and then realised this, but still submitted an incorrect payment application.

Evidence as to which of the above categories the contractor’s behaviour fell into is likely to be obtained from the documentary review and personnel interviews referred to on the previous pages.  For example, on the assumption that the test results showing the actual quantity and quality used on the road are impartial and credible, and show a difference from the contract quantity and quality, and the contractor’s payment application claims the contract quantity and quality, then:

• If all of the contractor’s site records and the supplier’s delivery records show the actual quantity and quality, and the contractor’s payment application contains the contract quantity and quality, this suggests that only the contractor’s payment application is false (as the contractor’s site records and the supplier’s delivery records are consistent with the test results).
• If the supplier’s delivery records show delivery of the actual quantity and quality of material delivered to site, but the contractor’s site records show the contract quantity and quality as having been received on site and laid on the road, then this suggests that the contractor’s site records are false (as the supplier’s records are consistent with the test results).
• If all of the contractor’s site records and the supplier’s delivery records show the contract quantity and quality, this suggests that all of these records are false, as they are inconsistent with the actual outcome shown in the test results.

All three examples above suggest a different level of involvement in the production of false records.

• In the first example, only the payment application is incorrect, which suggests involvement only of the relevant personnel who produced the application.
• In the second example, incorrect records have been produced by the contractor’s site personnel.
• In the third example, incorrect records have been produced by both the contractor’s site personnel and the supplier’s personnel.

In all of the cases above, the relevant personnel are likely to claim that it was an error.  Whether this is plausible will depend on the circumstances and extent of the claimed error.  It is quite possible for occasional and one-off errors in documents to occur.  If, as per the first example above, only the payment application is incorrect, it may be possible that this is a one-off error (although the excuse of error may be implausible if the defects in quantity and quality are very obvious).  However, if the errors are significant and repeated, and involve different categories of document, and should have been obvious to the relevant personnel, as in the second and third examples above, then this is more likely to be reckless or deliberate act, which is sufficient to result in a finding of fraud.