Carillion Liqudiation

krish

It's down to Government to figure out what a realistic bid is, and reject those that are taking the mickey. But that requires bolstering the Civil Service's capacity to figure that sort of thing out.

Anyway Interserve is one to keep an eye on - After Carillion’s collapse, 'fears are growing' over the financial health of Interserve

Latest screw up - BAD PLANNING? - Huge Oxford roadwork plan postponed to 'look again' at cost


The Abingdon Road always floods (something the County Council never seems to take into account), I used to live at the bottom end of the Abingdon Road as a child. Can remember wading through flood waters in my wellies on the way to school near the traffic lights. Hopefully that flood relief channel will get built and it will ease the flooding issues. No flooding where I live, but there is a minor risk of it, if the sewers get overwhelmed.

EarthRod

In the case of the client being the govt, perhaps they should, lest it costs the taxpayers more if it all goes to sh*t?That's terrible if true - goes back to the last point about the govt as client.

rancidpunk

It wasn't government contracts that lost money, it was other contracts (not government) that caused the losses over the years which led to the final liquidation scenario.

"Payment delays from Middle East contracts and overreaching on projects that proved unprofitable led to financial woes for the company".

Cliff

I can't speak for central government contracts, but some council and private projects certainly do treat tenders like that. They know a realistic cost for the works involved and will reject bids they feel are too low. Yes, there's always a push on price, but it also needs to be realistic.
It's a little more nuanced now, but often the lowest and highest bids used to be rejected, and pick from what remained.

IronGiant

The client will have a rough idea of how much the job is going to cost but he will wait for the bids and if they all comply with the tender requirements, and are approved contractors with a good track record then he will usually take the lowest.
As tapz suggested, the client will work out the cost.... Well he cannot know the costs that the contractor has. For instance, if you are bidding on building a road one contractor may use dozers that are already paid for. Another may hire them, another may bid with brand new equipment. Mobilization of equipment to the location is another consideration. A local guy may have his labour force and equipment near he site. There will be other differences that distinguish betweeen the bids. Costs are  carefully calculated to the bone and profit margin added.
But bottom line, if contractor complies with tender, e.g. dozers must not be more than 5 years old, good safety record etc, then its down to price

Cliff

Maybe Jeremy should have checked exactly who awarded Carillion all those contracts before haranguing Theresa in Parliament

Confucius

As Theresa May said and corrected Jeremy that the government is not the manager of Carillion. I really don't know what his beef is. If the recent contracts had not been awarded then the company would have just gone bust sooner rather than later. It was bad management, leading to heavy debts and risk, and the banks that decided to pull the plug (rightly).

But never mind the hot air in PMQs today, if you heard John McDonnel today, he actually suggested these companies like this should be publically owned. Nearly fell off my seat!
Imagine, there would be no talk of collapse because the taxpayers would continue to support a badly managed inefficient company forever.
That was how it went in the old days, when everything was nationalised. Managers would just turn up on the governments doorstep and ask for more money.

EarthRod

The clue is in the street name...

Cliff

Isn't that how it works in private industry? If an ongoing project required more money the project manager would "just turn up" (your words) on the budget holder's "doorstep" and ask for more money?

maddy

Nigel Lawson's changes in the 1980s put paid to some of this way of planning and financing public sector projects:

Memoirs of a Tory Radical

There are many benefits to PFI contracts - not least that the maintanence is done on a contractual basis and so the buildings have to be kept to a certain standard.