Tuesday, 16 January 2018

Carillion - a little extra input

Couple of talking points keep coming up about Carillion. 

Firstly that contracts should not be awarded to the lowest bidder - they usually are not in the Public Sector, but are awarded on the basis of Most Economically Advantageous Tender, i.e. Value for Money.  Obviously price is a factor.

Secondly, sub-contractors accuse companies like Carillion of not paying promptly (Carillion seem to have used factoring of invoices, so that should not be a problem).  Public Contracts require contractors to pay sub-contractors within 30 days.  If they do not then a) the sub-contractor can charge interest at 8% above base rate (i.e. 8.5% at the moment) b) the public sector client can arrange to pay sub-contractors directly and c) late payment may be held against them as a reason for not allowing them to bid for future contracts (in extremis).

I'm not saying these are not problems - they are - but there are existing provisions that could deal with them if applied and enforced.

Monday, 15 January 2018

Carillion - public sector contracts

I am sure that there are going to be a lot of "hot takes" on Carillion going into administration.  It is too early for me to go into it in detail, but a couple of key points to think about.

1. Procurement has to look at Risk as well as price and cost - a consolidation of suppliers may lead to efficiencies but can also increase risk
2. Bigger is not necessarily safer than smaller.  Think also of Connaught and the hard work Serco have had to do to turn themselves round from a big operating loss.
3. Apart from banks no UK business is too big to fail.
4. Contract management is key for the public sector.  It ensures contractors cannot make up for underbidding by changes and variations
5. Buyers need to be very careful about possible underbidding (by SMEs and charities as well as big contractors) - companies need to make enough profit to ensure they survive when things go wrong.  And at some point they will.
6. Split supply may be safer, but less efficient
7. Privately owned companies are not perfect.  I know that is obvious, but it is not what we sometimes hear when we talk about private companies delivering public services.
8. Public sector contracts normally prevent suppliers from assigning contracts to third parties without the buyer's permission.  We hear the government as been ensuring that Carillion contracts can be easily passed on to a new contractor of our choice.  That is good news.
9. I would not expect many of Carillion's contracts to be re-tendered in the near future.  Short term continuity will take precedence over the need for competition.
10. This will look bad on the UK, as overseas contracts will also be thrown into disarray including work on the Qatar world cup which like all such projects is on a tight timetable.
11.Finally, spare a thought for the sub-contractors and suppliers.  They are likely not to be paid anything for a long time, and then be offered pennies on the pound.  It is likely some will go bust.  It is not their fault, nor (most) of Carillion's staff and I hope they manage to get through.

This is another major shock to Britain's construction industry (after the collusion prosecutions, and Connaught).  I hope it can bounce back quickly

Wednesday, 3 January 2018

IChemE webinar series: Engineering Procurement January 2018

I am delighted to be dipping my toes into the webinar waters with a series on Engineering Procurement for IChemE.

These 4 webinars will be first run in January/February 2018, and will then be available to purchase from IChemE.

Details are here. 

We start on Tuesday 16th January 2018 9am and 4pm.  The advantage of joining us then is that you can take part in the live Q&A sessions.

Hope you can join us.
PS (sorry about getting the day wrong - definitely Tuesday 16th - part 2 Tuesday 23rd January 2018)

Sunday, 17 December 2017

Best wishes for 2018

2018 still sounds the future to me, but it is only a couple of weeks away.

2018 will mark 20 years of PAWA Consulting  - what a long strange trip it has been.  2017 has been one of our best years ever, and I am looking forward to a break and then diving back.

There will be the usual mix of open and in-house training courses through a number of providers, including for the first time online webinars that can be bought and viewed at any time.  There may be other stuff too - but first the holidays.

So Merry Christmas, and a Happy New Year to you - hope 2018 finds you healthy, happy and prosperous.

Thursday, 30 November 2017

Procurex South 15th March 2018 - London Olympia

I should be presenting at BIP Solutions Procurex South next year, as well as some of their other events.  Always good events, and a good venue too.  Hope to see you there.

Tuesday, 11 July 2017

CIPS Public Sector Skills Programme

CIPS are running a series of Summer schools on Public Sector Procurement.  These 3 days that should give a good grounding in UK Public Procurement, and they expand on the two single day courses we run as open training.

Bravely I am leaving the last session to talk about Brexit.  Wish me luck. 

I shall be running all of them, though CIPS is shy of mentioning that - obviously not wanting to put people off.

Full details are available here.

Dates and venues (non-residential) are;
18-20 July 2017
Holiday Inn Kensington Forum, London
29-31 August 2017
Radisson Blu Hotel, Manchester Airport
13-15 September 2017
Radisson Blu Hotel, Edinburgh