Carrilion in trouble

[turbomoped]

lets look on the bright side , you may have had business with them where you knew you couldn't deliver and they would have clobbered you.
You are theresa may and called a general election before the stshow was exposed thanks
to some collusion to make them look good.
The taxpayer wont bail them out apparently but hang on RBS is owned by the taxpayer so their losses are our losses.
Lucky the election isn't for many years for the lucky tories who dodged the towerblock blaze by a few months as well.

[Lotobear]

...what did the tower block blaze have to with the Govt?

[turbomoped]

people get angry about things and vote for the opposition. Thats how these clowns got elected in 2010
Gordon brown apparently being to blame for everything.

Edited by turbomoped on Tuesday 16th January 16:07

[anonymous-user]

Lotobear said:

...what did the tower block blaze have to with the Govt?

What does the ‘government’ have to do with Carillion?

Did government ministers directly negotiate with and award contracts to Carillion? I’d have thought it was some civil servant who was doing that.

[anonymous-user]

Lotobear said:

I worked for Mowlem for 5 years when they were an excellent firm with a great reputation, such a shame they were sucked up by this outfit.

I guess I can kiss my pension rights goodbye now

Carillion JM ( Mowlem as was) is still a separate Limited Company isn’t it? With the same CEO from years back. Are you sure your pension isn’t with them?

[Lotobear]

I get my annual pension statement from 'Carillion' but, having just checked, it does refer to it as The Mowlem Staff Pension and Life Assurance Scheme, so perhaps all is not lost!

There's bugger all in it anyway though given 5 years service, it may buy me a couple of weekends away each year in my dotage!

[Vocal Minority]

REALIST123 said:

What does the ‘government’ have to do with Carillion?

Did government ministers directly negotiate with and award contracts to Carillion? I’d have thought it was some civil servant who was doing that.

Government ministers ultimately carry the can. That is half of their job. If they let themselves get railroaded by some mandarin 'Sir Humphrey' style...they only have themselves to blame.

The fact that the non-executive chairman of Carillion was a long term advisor to number 10 as well doesn't prove a thing.....but it doesn't exactly say 'nothing to see here'.

[frankenstein12]

MartG said:

frankenstein12 said:

The government continuing to award them contracts was 100% the correct thing to do. Had the government not done so they would have gone belly up over a year ago.

You can put on your tinfoil hat and believe it was all a nasty tory scam favours for friends etc but the simple reality is that had the government stopped providing them with contracts the banks would have withdrawn funding sooner.

So ? The phrase 'good money after bad' comes to mind

Good money after bad??? The government will have received what they paid for if not more so. I find it unlikely they government will lose much financially from awarding the contracts as apparently the contracts awarded from mid last year were all awarded on the basis of Carillion having partner firms as surety to pick up if Carillion went belly up.

[frankenstein12]

PurpleMoonlight said:

frankenstein12 said:

This garbage is whats been really bugging me all frigging day. The government continuing to award them contracts was 100% the correct thing to do. Had the government not done so they would have gone belly up over a year ago.

And the Government would have less of a mess to sort out.

Public contracts and money should not be used to prop up a bad business.

No they wouldnt.

In some respects what the government has done is extremely smart (for once) as instead of simply letting the company fold they have given it contracts keeping it afloat and giving it a lifeline to try restructure and save itself while at the same time making sure that all those contracts given to Carillion have guarantors meaning when or if the company went bust structures/other companies were in place to cover those contracts and minimise disruption.

[frankenstein12]

janesmith1950 said:

Smiler. said:

Absolutely.

This story is going to run & run, rightly so imo.

I hope it will prompt reform in the way government & their departments deals with public sector contacts along with how companies conduct themselves.

Just because shareholders don't oppose the pay deal for a CEO doesn't make it right.

The prospect of having their grubby dealings in the public eye & profitable business curtailed by the rise of the rabid left might make them think twice.


Any back-slapping by government ministers (of any colour) & civil servants to their mates in business needs to be exposed & heads roll.

Public companies have to have their 'grubby dealings' done in the public eye.

Unfortunately this case looks like a combination of bad buyer and bad seller. Buyer accepts deals on price and timescale unlikely to be achievable and seller agrees to same.

Buying ought to be about value rather than pounds, shillings and pence cost.

This is also incredibly correct. Sadly the government does not understand proper value or management and unfortunately the present conservatives are utterly appallingly bad at understanding how to get best value in the old sense of buy cheap buy twice....

That combined with a race to the bottom by most companies rather than the companies operating a policy of winning business by outperforming each other or finding a market USP has led to this issue with carrillion.

[Vocal Minority]

If this leads to a world where a public tender is at least equally weighted between cost and quality I am all for it.

[frankenstein12]

aeropilot said:

Lotobear said:

...by having a previous career in accountancy

Or an MBA in something or other, but usually unrelated to the industry they are working in.

The trouble is with margins so tiny compared with 30-40 years ago, there's no money invested by all these firms in the internal in-house training schemes that the Big 6 contracting firms used to run back when I started in the industry back in 1980. They pulled the plug on those, and all their internal technical departments by the mid 1990's. Most of those firms aren't even in existence now, or have been swallowed up and re-named as part of the new breed of mega firms, like Carillion, or other foreign owned firms.

Yet again flawed practices. The company I work for who got bought out a few years ago by a well known investment group have for as long as I have worked for them had strict policies in place for customers. Certain longstanding customers get i think 45 day terms to pay but EVERY customer goes through clearing before we do any work for them whre their credit and corporate viability is checked.

Most of what I work on are civil service projects through intermediary companies and we work off PO's. if a PO runs out we stop work simple as. A few customers who in the past have taken the piss with paying up have found themselves on our blacklist and we will not work without payment up front.

As to margins claims that you cannot make a decent margin these days is simply not true. The field we work in is not unique (IT) historically our USP and customer support is what has retained our customer base and brought us new ones.

The division I work in consistently hits our margins and they are plenty healthy.

At the end of the day it comes down to how you provide your service to your customers and most of ours are government who are meant to (according to most people) use the cheapest which we are not.

My father ran his own businesses in the 90's and he taught me business and one of the most amazing things to me was that he was one of the most expensive in the region and yet his customers were fiercely loyal meaning even big multinationals struggled to get any business in the areas he operated.

Dont always agree with your customer or give theme everything they want. If one of my fathers customers asked him to supply cheaper and what my father considered inferior/potentially unreliable products my father would refuse to do so and explain his reasoning a policy I adopt with my customers even today.

Every Christmas he would send a bottle of wine and a Christmas card to each of his customers even those who had only used him once for a small job.

It was simple things.

In business it is the simple touches that make the difference. Make the customer feel appreciated not just that they are there to pay your bills.

Edited by frankenstein12 on Tuesday 16th January 17:43

[Usget]

A poster a few pages back - can't be arsed to work my way backward and quote - said that he worked in public sector procurement and "it is almost impossible not to award contracts to the lowest bidder."

That, in my humble one, is the hit of the whole fruit. Change that system, fire anyone in the civil service who disagrees, and see if the culture improves. And disqualify any company giving more than 30 day terms to its suppliers, too.

[crankedup]

Usget said:

A poster a few pages back - can't be arsed to work my way backward and quote - said that he worked in public sector procurement and "it is almost impossible not to award contracts to the lowest bidder."

That, in my humble one, is the hit of the whole fruit. Change that system, fire anyone in the civil service who disagrees, and see if the culture improves. And disqualify any company giving more than 30 day terms to its suppliers, too.

Award the contract to the second lowest bidder, or maybe the third lowest bidder. Or perhaps we need more SME Companies offered a chance to bid for smaller contracts, Dunno, not my field.

[Shamrock_]

Willy Nilly said:

How do people manage to get into positions of responsibility and end up running businesses like this with seemingly no ability to do so?

Private school education?

[doosht]

Willy Nilly said:

How do people manage to get into positions of responsibility and end up running businesses like this with seemingly no ability to do so?

Yes, this!

[Drumroll]

So how do we award contracts fairly if it is not to the lowest bidder?

Agree it is not ideal, but it is at least relatively transparent. Can you see all the legal wrangles if contractor "B" got a contract but "A" was cheaper? (We are talking about public contracts here) "Did "B" get it because their boss gives to the Conservative/Labour party or didn't "A" get it because they wouldn't give the head of procurement that little bit more (for him/her)

[Willy Nilly]

Drumroll said:

So how do we award contracts fairly if it is not to the lowest bidder?

Agree it is not ideal, but it is at least relatively transparent. Can you see all the legal wrangles if contractor "B" got a contract but "A" was cheaper? (We are talking about public contracts here) "Did "B" get it because their boss gives to the Conservative/Labour party or didn't "A" get it because they wouldn't give the head of procurement that little bit more (for him/her)

Do you always buy the cheapest product and if you do, what are your expectations of the product?

I would have thought that when a project is put out to tender, the people putting out the tender need to look at the cost to get the job done on time and to spec. So when someone comes in with a really low ball price they will have pretty good idea that it won't be possible at that price. As has been shown, it's all very well going for a low bidder, but it's not much use when they go bust before the project is complete. Never mind cutting corners, not paying suppliers, using dodgy labour, and having no money left for snagging.

[Lotobear]

You interview the lowest two and drill down remorselessly into their tender, probing in every direction and exploring every potential weakness.

You soon get a nose as to their appetite for claims.

I've had a number of projects where the lowest contractor has been rejected on the basis of such an exercise, sometimes at a significant price difference (over 100k). In every case subsequent events have shown that the lower bidder was not the best price but it requires an intelligent/enlightened client to ignore the bottom line and look to where the real value lies.

It's absolutely horrible running a project where the contractor is primed for claims from day one.

Okay these are small contract in comparison to the likes of Carillion but I'm sure the same principles will apply.

[scrw.]

Usget said:

A poster a few pages back - can't be arsed to work my way backward and quote - said that he worked in public sector procurement and "it is almost impossible not to award contracts to the lowest bidder."

That, in my humble one, is the hit of the whole fruit. Change that system, fire anyone in the civil service who disagrees, and see if the culture improves. And disqualify any company giving more than 30 day terms to its suppliers, too.

Having done reviewing of OJEU tenders, you have to be really careful on how you assign points to the price, I have seen some people "win" the bid when its was blatently obvious they couldn't technically complete the work.