The Single Version of the Truth:

Martin Perks
Feb 13
3 min read

Why Construction Contracts Now Matter More Than Ever

For years, construction contracts have been treated as a necessary inconvenience—something legal insists on, commercial teams work around, and project managers only look at when things go wrong. That approach is no longer good enough.

The UK’s Failure to Prevent Fraud (FTPF) offence, part of the Economic Crime and Corporate Transparency Act 2023 (ECCTA), is now in force. The ground rules have changed. If a fraud is committed by an employee, agent, or subcontractor for the benefit of your organisation, your business may be criminally liable unless you can demonstrate that you had "reasonable procedures" in place to prevent it.

A Hard Stop for the Industry

The September 2025 implementation of this offence wasn’t just another compliance date; it was a hard stop. We are now operating in a regime of strict liability. This means a company can be prosecuted regardless of whether senior management knew about the fraud.

In the complex supply chains of infrastructure and construction, this is a game-changer. Think about a subcontractor manipulating completion data to trigger a payment. Under the new law, if that action was intended to benefit your organisation (for instance, by meeting a regulatory milestone), however remote it seems from the tier one contract, your company is on the hook.

"The only defence is proving you have 'reasonable procedures' in place right now, not just policies on a shelf, but real, working procedures that stand up to scrutiny".

The Risk of Fragmented Data

Most major projects operate with contract data scattered across multiple systems: Commercial uses one set of documents, Finance another, and project teams a third. This fragmentation is now your live legal risk.

If your supplier management relies on incomplete or inconsistent contract data, you cannot prove you have reasonable fraud prevention procedures. You are exposed. To defend your business, you need a Single Version of the Truth (SVOT); a unified ecosystem where the contract and performance data live together. See this related article.

From Sampling to Digital Cost Assurance

The traditional approach of "sample-checking" 5% of invoices is no longer a "reasonable" defence. Modern projects generate vast amounts of data that allow for far more robust monitoring.

By adopting Digital Cost Assurance (DCA), organisations can move to 100% automated auditing. This allows you to:

Monitor supplier behaviour continuously and proportionately against actual contract terms.
Identify "defection", actions like inflating claims or cutting corners, before they become legal liabilities.
Provide a forensic audit trail that proves your procedures are working in the real world.

Beyond Compliance: The Operational Edge

Implementing a Single Version of the Truth isn't just about staying out of court; it’s about better business. See this related article.

Reduced Disputes: Disputes thrive on ambiguity. When everyone works from the same data, the argument over "what happened" often dies before it begins.
Better Asset Data: Many projects hand over poor data to operations, spiking maintenance costs. Accurate "as-built" records ensure network resilience.
Commercial Trust: Transparent, controlled projects improve supplier behaviour and trust across the entire supply chain.

Next Steps: The Grace Period is Over

It is too late to "prepare" for this legislation; you need to be compliant today. If a subcontractor falsified completion data this morning, would your current systems flag it?. If the answer is no, your defence under the Act is likely non-existent.

At Black Pear Advisory, we help infrastructure businesses establish the technical systems and organisational change needed to protect themselves. We combine a deep understanding of the ECCTA with the practical realities of major project delivery.

Don't wait for an incident to test your defences. Contact Martin at Black Pear Advisory today to review your exposure and develop an immediate action plan.

Dr Martin Perks is a specialist in construction commercial management, Construction specific business coaching, automated cost assurance, and fraud risk. Black Pear Advisory Ltd is a management consultancy specialising in infrastructure.