Documents show subcontractors have agreed to discount rates

Subcontractors have signed up to price cuts of up to 20% in an attempt to keep winning work with Carillion.

The deep discounting comes as Carillion cuts its supplier base from 25,000 companies to just 5,000.

According to documents seen by the Sunday Telegraph, some suppliers have already agreed to offer discount rates of up to 20% over the next three years.

Carillion said it has no group wide policy requiring discounts. However the Telegraph said suppliers were told that if they fail to accept the new terms they were likely to lose work.

One supplier said he was pitching for work despite the fact it would be loss-making.

He said: 鈥淲e don鈥檛 have a 20% margin to give them. To get to work on a Carillion contract is super competitive anyway.鈥�

Carillion said it selected its preferred suppliers on 鈥渁 myriad of requirements鈥� including health and safety, quality, reliability of delivery, and pricing.

A spokesman said: 鈥淚t is a competitive market and if suppliers offer discounts, and in some instances double digit proposals, this sets a benchmark for other suppliers.鈥�

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