Carrilion in trouble

[vonuber]

Drumroll said:

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

Bids are also weighted in terms of 'quality' and also previous experience.
We've won quite a few private sector jobs on quality rather than price.

[anonymous-user]

p1stonhead said:

Pennies on the pound possible.

Torygraph reporting likely less than 1%! Admittedly I can't bring myself to pay for their bilge so that's just he headline...

http://www.telegraph.co.uk/business/2018/01/16/fts...

[2 sMoKiN bArReLs]

p1stonhead said:

cossy400 said:

Being abit grass is green to something of this scale.

the ones that are owed big money like that is just a suck it up, or will they see any portion of it?

1.6 and 2 million are not pocket change to be losing after all.

Pennies on the pound possible.

It'll be nothing.

Any funds recovered will be absorbed by the insolvency teams (most likely)

Most outstanding debts will also now have massive counter claims

[Yipper]

Digga said:

I wonder whether, finally, examples are going to be made?

Doubt it. They'll sweep it under the carpet.

The top directors and top auditors should really be charged with fraud (or similar) and have their day in court for financial terrorism.

[Countdown]

Vocal Minority said:

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

You can weight them however you feel appropriate. There's no rule that says cost score must equal at least 50%.

[aeropilot]

Lotobear said:

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.

Not many of those enlightened clients around sadly...........and very few in the Civil Service/Govt departments fall into that category.

[Countdown]

anonymous said:

[redacted]

I'm not sure what you mean. For some contracts there will be a price threshold, simply because that's what the budget is. In this situation price will be in one of the "PASS/FAIL" questions i.e. is your bid under £30k? If yes proceed to stage 2, if not then goodbye.

Not all tenders will have that because, if it's a new project/service then nobody on the procurement side will be able to estimate it with any degree of accuracy. if this is the case (eg Build a new school to this design) then the evaluators will look at what the bidder is delivering and what price they are charging. the cheapest won't necessarily win if somebody else is delivering a much better service for only a slightly bigger price.

I was part of an evaluation where the winner (Grant Thornton) was more expensive that Deloitte's but won on quality. Their bid was tailored to what we needed whereas Deloitte had just done a cut'n'paste job. Equally I've been on the evaluation panel where we've awarded the contract to one of the Big 4 even though they weren't the cheapest bidder. It was because we had more confidence on them delivering advisory services on a £120m project.

[frankenstein12]

anonymous said:

[redacted]

So much so its staggering and immensely infuriating. I am involved with bid writing to projects in civil service for a private company and there is an intermediary company in between and the I know what the customers actually end up paying as opposed to what we bid and the numbers are insane.

I cannot understand how anyone could ever agree to contract terms that are so incredibly obviously poor value.

I suspect anyone with any actual sense who has been involved in the private to civils would be able to save literally billions a year if they were allowed to get in and change all the projects.

[Usget]

Drumroll said:

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

I'm not going to be flippant enough to try and define it here, but it cannot be beyond the wit of humankind to design a balanced scorecard which values quality and sustainability as much as it values price.

Of course, it won't help that any time the government is seen to be paying "over the odds", the tabloids get on their high horses about how many nurses and/or firefighters could have been bought with the proceeds. So their hands are tied to a large extent.

Edit to add - I work for a very large consultancy and we'd never win a single contract if everything was done on price. We are like Stella Artois and yet, as legend would have it, nobody ever got fired for buying from us. The best work that we do is with clients who work with us, trust us, and don't try to hammer us for every single penny.

Edited by Usget on Tuesday 16th January 20:34

[Rovinghawk]

aeropilot said:

Also, too much diversification into 'non-job' areas, which seems to generate ever more job roles that appear to be no more than 'tick box' roles from people that sit on their arses all day doing nothing but re-distribute emails, the content of which they have very little understanding of.

Carillion excelled at having these clowns.

aeropilot said:

I've worked in teams attached to most of the 'big contractors' other than Carillion (thankfully) and its shocking the level of technical understanding a lot of these management people have...

I've had a fair few meetings where I've given them several months' notice of an impending issue (over a year in one case) and they still managed to encounter the problem nose first.

I've also had various meetings on technical issues where it's been blindingly obvious that they hadn't even taken a cursory glance at the design prior to planning their works, being utterly shocked when I pointed out things that were written in big letters on pretty much the front page.

Most of them deserve everything that's happened.

Edited by Rovinghawk on Tuesday 16th January 20:43

[Countdown]

anonymous said:

[redacted]

Were they not obliged to follow Crown Commercial Service rules? If not I'd be interested to know which Department it was and whether or not you can post a link to it on Contract Finder.

https://www.gov.uk/contracts-finder

[Welshbeef]

For a short term “help” which wouldn’t be putting the tax payer in the hole why do the state not advance payment of invoices to Carillion.

A cash injection like that could keep he ball rolling for a longer period of time and rather than 20,000 people out of work now plus knock on impact to supply chain it will give the sector the chance to take over contracts / or at least have some time to plan an outcome.

[frankenstein12]

Welshbeef said:

For a short term “help” which wouldn’t be putting the tax payer in the hole why do the state not advance payment of invoices to Carillion.

A cash injection like that could keep he ball rolling for a longer period of time and rather than 20,000 people out of work now plus knock on impact to supply chain it will give the sector the chance to take over contracts / or at least have some time to plan an outcome.

Tax money down a drain. The company has shown little ability to reform and rectify its situation of its own will and as such the government would be better spending it on coke and hookers as it would be better VFM.

[RammyMP]

I worked for a national contractor that went bust a couple of years ago, hundreds of sub-contractors were owed a lot of money, quite a few went under as well. What pissed me off was what the administrator was getting paid, it was astronomical, meanwhile myself, the other former employees and sub-contractors got nothing.

They even had the cheek to send out a letter after 12 months asking our permission to carry on working as there was still money outstanding from the companies former clients!

[Countdown]

anonymous said:

[redacted]

Ok, that's slightly different. It sounds like an outsourcing of what was a previous in-house service rather than a "clean slate" project or service. I've done several of these, mainly to organisations such as Mitie, Interserve, Sodexho, and G4S.

These aren't (what I call) genuine procurement exercises. The ones I was involved with were driven by political ideology - the view that the private sector MUST be cheaper than in-house Public sector staff. Perhaps a discussion for a different thread....

[aeropilot]

Rovinghawk said:

I've also had various meetings on technical issues where it's been blindingly obvious that they hadn't even taken a cursory glance at the design prior to planning their works, being utterly shocked when I pointed out things that were written in big letters on pretty much the front page.

Basic failure to bother to even read let alone understand drawings/specs/calcs is rife on the project I'm working on for another 'big' contracting firm......its astonishing.

Never used to encounter this basic lack of, well, err.....basics, back in the 80's/90's etc.

The industry is going backwards, not forwards, and that's not even mentioning the seemingly never ending round of 'Billy big bks' run meetings that amount to nothing more than a game of buzz-word bingo..........

[Countdown]

Welshbeef said:

For a short term “help” which wouldn’t be putting the tax payer in the hole why do the state not advance payment of invoices to Carillion.

A cash injection like that could keep he ball rolling for a longer period of time and rather than 20,000 people out of work now plus knock on impact to supply chain it will give the sector the chance to take over contracts / or at least have some time to plan an outcome.

If they advance payments of invoices to carillion (for work which Carillion hasn't carried out) who is goig to do the work for ffree once Carillion finally DO go belly up?

It's not a cashflow timing issue, it's a lack of profits and finally running out of cash issue.

[Randy Winkman]

Vocal Minority said:

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'.

Yes, and the Sir Humphrey stuff isn't as common as people might think. All big decisions are made by ministers and not by civil servants. Ministers base decisions on briefing and recommendations provided by civil servants but if they don't like the recommendation they just say "no". And civil servants don't work for the public, they work for the government, so their main objective each day is to keep the relevant ministers happy.

[jules_s]

Countdown said:

he cheapest won't necessarily win if somebody else is delivering a much better service for only a slightly bigger price.

I was part of an evaluation where the winner (Grant Thornton) was more expensive that Deloitte's but won on quality. Their bid was tailored to what we needed whereas Deloitte had just done a cut'n'paste job. Equally I've been on the evaluation panel where we've awarded the contract to one of the Big 4 even though they weren't the cheapest bidder. It was because we had more confidence on them delivering advisory services on a £120m project.

Construction tenders are quite a bit different to service though

The problem with the cost/quality evaluation is that the contractors use heavyweight bid consultants who prepare the documents far better than the evaluator's are capable of measuring....which I think is where Tonker is coming from

So the quality side is diminished between bids because the tenders are nigh on identical in content....which then leads you into cost/quality and scoring weighting, a process which can look bent even when it isn't

Then you have the interviews which sometimes are just plain odd. Ask for the delivery team to attend (they do) and the MD feels the need to answer every question not letting anybody else get a word in

[checkmate91]

Usget said:

I'm not going to be flippant enough to try and define it here, but it cannot be beyond the wit of humankind to design a balanced scorecard which values quality and sustainability as much as it values price.

Of course, it won't help that any time the government is seen to be paying "over the odds", the tabloids get on their high horses about how many nurses and/or firefighters could have been bought with the proceeds. So their hands are tied to a large extent.

Edit to add - I work for a very large consultancy and we'd never win a single contract if everything was done on price. We are like Stella Artois and yet, as legend would have it, nobody ever got fired for buying from us. The best work that we do is with clients who work with us, trust us, and don't try to hammer us for every single penny.

Edited by Usget on Tuesday 16th January 20:34

Well put. I've spent 20 years in the public sector and a further 20 years in business and outsourcing advisory. The elusive VFM formula is still, well, elusive.