Carrilion in trouble

[Matt p]

Yipper said:

Carillion is based in Wolverhampton...

This looks like yet another company from the poorer parts of northern Britain trying to compete with and show off to the big boys in London -- but lacking the world-class skills or trained staff to pull it off.

Other examples of the "little-man syndrome" genre in recent years include RBS, BoS and B&B.

It's a familiar pattern... Reckless debt, reckless pricing and reckless management decisions... Boom and bust...

A worrying trend.

Shut up you

[Blue62]

When I ran a mid size consultancy (I sold a few years ago) we were constantly pushed around by the likes of Capita and Carillion on public sector contracts, to the point where they would do just about anything to squeeze out smaller players, constantly over promising and under delivering. I despaired then as I do now for the way in which public (and many private) sector tenders are managed, price is all that matters and invariably the winning bidders cannot sustain their business model based on the rates they go in at, they squeeze the competition and the client suffers through poor service and inevitably increased costs as a result of inefficiencies in the supply chain.

I feel sorry for the people who work for these cowboys, hopefully most will be redeployed, but I'd be seriously concerned if the tax payer ends up bailing them out, their business models are not sustainable and here is the proof.

[bristolracer]

Blue62 said:

I despaired then as I do now for the way in which public (and many private) sector tenders are managed, price is all that matters and invariably the winning bidders cannot sustain their business model based on the rates they go in at, they squeeze the competition and the client suffers through poor service and inevitably increased costs as a result of inefficiencies in the supply chain.

Its been like this for years. Companies slashing prices to get contracts and hoping to make good on the variations.
There is no sense to it.Its like your garage slashing the price of a service to get you through the door and hoping that there is something else faulty with your car. Its not sustainable.

[Smiler.]

Is part of this problem the civil service & their workers who create the environment for outfits like Carillion to thrive?

I recall a director of Skanska once told me on the subject of a PFI hospital that they "love" PFI projects. They got a massive bung of money up front, which they just banked & earned interest on whilst demanding 120 day payment terms from their suppliers & sub-contractors. This was tax-payers money.

That was the day I lost all respect for the snout-faced troughing tt.

What happened to him? An OBE for his work on the MOD relocation & a promotion.

FFS.

[GrumpyTwig]

Yipper said:

Carillion is based in Wolverhampton...

This looks like yet another company from the poorer parts of northern Britain trying to compete with and show off to the big boys in London -- but lacking the world-class skills or trained staff to pull it off.

Other examples of the "little-man syndrome" genre in recent years include RBS, BoS and B&B.

It's a familiar pattern... Reckless debt, reckless pricing and reckless management decisions... Boom and bust...

A worrying trend.

Northern? Have you seen a map?

[GT03ROB]

bristolracer said:

Blue62 said:

I despaired then as I do now for the way in which public (and many private) sector tenders are managed, price is all that matters and invariably the winning bidders cannot sustain their business model based on the rates they go in at, they squeeze the competition and the client suffers through poor service and inevitably increased costs as a result of inefficiencies in the supply chain.

Its been like this for years. Companies slashing prices to get contracts and hoping to make good on the variations.
There is no sense to it.Its like your garage slashing the price of a service to get you through the door and hoping that there is something else faulty with your car. Its not sustainable.

But isn't that just companies reacting to the way tenders are awarded? I spent a long time working for a very successful LSTK EPC contractor. We would evaluate & award bids from subcontractors based on a sensitivity & equalisation analysis of their proposal not their actual proposal. It meant we didn't always award to the lowest bidder. The fault lies in the evaluation & award process. I repeat buy cheap buy twice. The same company executes work for the UK government very profitably without carillon's issues.

[Jockman]

GT03ROB said:

But isn't that just companies reacting to the way tenders are awarded? I spent a long time working for a very successful LSTK EPC contractor. We would evaluate & award bids from subcontractors based on a sensitivity & equalisation analysis of their proposal not their actual proposal. It meant we didn't always award to the lowest bidder. The fault lies in the evaluation & award process. I repeat buy cheap buy twice. The same company executes work for the UK government very profitably without carillon's issues.

I do a lot of work with the Coop, Rob. They are >very< interested in the financial health of my company and whilst price is important they use a variety of metrics in deciding on tenders.

[EddieSteadyGo]

GT03ROB said:

We would evaluate & award bids from subcontractors based on a sensitivity & equalisation analysis of their proposal not their actual proposal. It meant we didn't always award to the lowest bidder.

That is quite an advanced and enlightened view - it means the person/s making the decision has to properly understand how the service is going to be performed, and to make a judgement on the feasibility of the proposition, rather than relying on the contract specification and the quoted price. Definitely the correct way to do it though in most situations.

[GT03ROB]

Jockman said:

GT03ROB said:

But isn't that just companies reacting to the way tenders are awarded? I spent a long time working for a very successful LSTK EPC contractor. We would evaluate & award bids from subcontractors based on a sensitivity & equalisation analysis of their proposal not their actual proposal. It meant we didn't always award to the lowest bidder. The fault lies in the evaluation & award process. I repeat buy cheap buy twice. The same company executes work for the UK government very profitably without carillon's issues.

I do a lot of work with the Coop, Rob. They are >very< interested in the financial health of my company and whilst price is important they use a variety of metrics in deciding on tenders.

Exactly. Sophisticated clients understand smart arse contractors. Clients get the contractors they deserve.

[Jockman]

EddieSteadyGo said:

GT03ROB said:

We would evaluate & award bids from subcontractors based on a sensitivity & equalisation analysis of their proposal not their actual proposal. It meant we didn't always award to the lowest bidder.

That is quite an advanced and enlightened view - it means the person/s making the decision has to properly understand how the service is going to be performed, and to make a judgement on the feasibility of the proposition, rather than relying on the contract specification and the quoted price. Definitely the correct way to do it though in most situations.

The elephant in the tender room, Eddie, is always 'risk'.

[poo at Paul's]

Yipper said:

Carillion is based in Wolverhampton...

This looks like yet another company from the poorer parts of northern Britain trying to compete with and show off to the big boys in London -- but lacking the world-class skills or trained staff to pull it off.

Other examples of the "little-man syndrome" genre in recent years include RBS, BoS and B&B.

It's a familiar pattern... Reckless debt, reckless pricing and reckless management decisions... Boom and bust...

A worrying trend.

There's stupid, there's fking stupid, and then there is this!

[FN2TypeR]

Smiler. said:

Is part of this problem the civil service & their workers who create the environment for outfits like Carillion to thrive?

I recall a director of Skanska once told me on the subject of a PFI hospital that they "love" PFI projects. They got a massive bung of money up front, which they just banked & earned interest on whilst demanding 120 day payment terms from their suppliers & sub-contractors. This was tax-payers money.

That was the day I lost all respect for the snout-faced troughing tt.

What happened to him? An OBE for his work on the MOD relocation & a promotion.

FFS.

I used to work for a mechanical/electrical contractor called Airedale, we did the Mansfield Hospital for Skanska and their payment terms were indeed (in my personal opinion anyway) punitive.

The st rolled down hill though because my employer just acted in the same fashion towards our suppliers, a sad state of affairs all round.

The job was an abject disgrace in terms of project management from Skanskas side too, I have never seen a building site so poorly managed, they talked a good game and presented a professional appearance but that was about as far as it went quality wise.

[2 sMoKiN bArReLs]

FN2TypeR said:

Smiler. said:

Is part of this problem the civil service & their workers who create the environment for outfits like Carillion to thrive?

I recall a director of Skanska once told me on the subject of a PFI hospital that they "love" PFI projects. They got a massive bung of money up front, which they just banked & earned interest on whilst demanding 120 day payment terms from their suppliers & sub-contractors. This was tax-payers money.

That was the day I lost all respect for the snout-faced troughing tt.

What happened to him? An OBE for his work on the MOD relocation & a promotion.

FFS.

I used to work for a mechanical/electrical contractor called Airedale, we did the Mansfield Hospital for Skanska and their payment terms were indeed (in my personal opinion anyway) punitive.

The st rolled down hill though because my employer just acted in the same fashion towards our suppliers, a sad state of affairs all round.

The job was an abject disgrace in terms of project management from Skanskas side too, I have never seen a building site so poorly managed, they talked a good game and presented a professional appearance but that was about as far as it went quality wise.

We were a subbie to Airedale. Did they have a private jet?

[FN2TypeR]

One of the owners had a company that leased out aviation simulators to companies wishing to train their pilots, it was called CRM Jetsim. I believe that the plane was owned/operated through that particular business avenue.

I worked for them 2007-2009 (sparky) and then for one of their electrical contractors thereafter.

[2 sMoKiN bArReLs]

FN2TypeR said:

One of the owners had a company that leased out aviation simulators to companies wishing to train their pilots, it was called CRM Jetsim. I believe that the plane was owned/operated through that particular business avenue.

I worked for them 2007-2009 (sparky) and then for one of their electrical contractors thereafter.

Airedale fecked us about...but I'm just guessing it was fleas on fleas (when the main contractor messes about all suffer). As an unsecured creditor, however, it did make me raise an eyebrow when I saw the private jet thing.

[FN2TypeR]

2 sMoKiN bArReLs said:

FN2TypeR said:

One of the owners had a company that leased out aviation simulators to companies wishing to train their pilots, it was called CRM Jetsim. I believe that the plane was owned/operated through that particular business avenue.

I worked for them 2007-2009 (sparky) and then for one of their electrical contractors thereafter.

Airedale fecked us about...but I'm just guessing it was fleas on fleas (when the main contractor messes about all suffer). As an unsecured creditor, however, it did make me raise an eyebrow when I saw the private jet thing.

The company cars were the eyebrow raiser for me. One of the owners, Jamie, crashed one of them, a 911 IIRC, in to a field whilst showing off to one of the design lads.

We think that he was sucking him off

[colin_p]

Jockman said:

EddieSteadyGo said:

GT03ROB said:

We would evaluate & award bids from subcontractors based on a sensitivity & equalisation analysis of their proposal not their actual proposal. It meant we didn't always award to the lowest bidder.

That is quite an advanced and enlightened view - it means the person/s making the decision has to properly understand how the service is going to be performed, and to make a judgement on the feasibility of the proposition, rather than relying on the contract specification and the quoted price. Definitely the correct way to do it though in most situations.

The elephant in the tender room, Eddie, is always 'risk'.

Depends who ends up owning it.

Bad luck if you are a contractor / sub-contractor who has made a mistake and inadvertantly ended up saddled with it.

Well played if you are a contractor / sub-contractor who suitably qualifies their tender and owns none or very little.

[fuzzyyo]

GT03ROB said:

Jockman said:

GT03ROB said:

But isn't that just companies reacting to the way tenders are awarded? I spent a long time working for a very successful LSTK EPC contractor. We would evaluate & award bids from subcontractors based on a sensitivity & equalisation analysis of their proposal not their actual proposal. It meant we didn't always award to the lowest bidder. The fault lies in the evaluation & award process. I repeat buy cheap buy twice. The same company executes work for the UK government very profitably without carillon's issues.

I do a lot of work with the Coop, Rob. They are >very< interested in the financial health of my company and whilst price is important they use a variety of metrics in deciding on tenders.

Exactly. Sophisticated clients understand smart arse contractors. Clients get the contractors they deserve.

Most tenders I've been involved with award points for price and a points for the design. Winner isn't always the cheapest. Although I've not had much experience with public sector tenders so not sure if they work this way.

[GT03ROB]

colin_p said:

Jockman said:

EddieSteadyGo said:

GT03ROB said:

We would evaluate & award bids from subcontractors based on a sensitivity & equalisation analysis of their proposal not their actual proposal. It meant we didn't always award to the lowest bidder.

That is quite an advanced and enlightened view - it means the person/s making the decision has to properly understand how the service is going to be performed, and to make a judgement on the feasibility of the proposition, rather than relying on the contract specification and the quoted price. Definitely the correct way to do it though in most situations.

The elephant in the tender room, Eddie, is always 'risk'.

Depends who ends up owning it.

Bad luck if you are a contractor / sub-contractor who has made a mistake and inadvertantly ended up saddled with it.

Well played if you are a contractor / sub-contractor who suitably qualifies their tender and owns none or very little.

Part of a thorough evaluation process is very much about understanding this & determining if the risk is in the right place.

Whilst on paper allowing the contractor to take on a risk may seem good for the client, ultimately that risk still resides with the client if the contractor can't carry the risk.

The best "value" bid is one in which the risk is allocated to the party best able to mitigate it. This may not align with the lowest cost bid.

[V8 Fettler]

Hopefully, our wonderful gubmint will have split the works into packages at the procurement stage so that other contractors currently employed by the gubmint can manage any increased workload created if Carillion should fold.