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Carillion in Liquidation

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WelshBluebird

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but you don't have to just accept the lowest bid.

The actual rules are fairly complicated from what I understand, but from what my friend who works for a local council has said in the past, you basically have to be seen to be providing "value for money". And if you have two bids, one a fair bit less than the other, well you wouldn't get much of a prize for guessing which one would win!

This whole having to tender for bids is a joke from what my friend has said anyway and usually wastes more time and money than what it is actually worth. That is probably more than I am allowed to know let alone say, but lets say it isn't surprising the situation some councils have found themselves in.
 
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ainsworth74

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This whole having to tender for bids is a joke from what my friend has said anyway and usually wastes more time and money than what it is actually worth.
I remember when I worked at a Local Authority for a while I had to tender for a print run of leaflets. I didn't even need that many (I think it may have been 500) but because of the value of that contract I had to go out to at least three different suppliers. Just for some leaflets...
 

Busaholic

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Carillion was born out of Tarmac. Back in the 1980s the company where my wife worked as a P.R. got it in their heads (or, to be more precise. the Managing Director did) that they could make synergies by taking over Tarmac: it would have to have been a so-called hostile bid though, and the more my wife found out about Tarmac the less she liked the look of what she discovered. A couple of her friends on the financial press also told her some (unattributable) home truths about Tarmac too, and eventually the idea was dropped. She felt her company had a lucky escape!
 

Dai Corner

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The actual rules are fairly complicated from what I understand, but from what my friend who works for a local council has said in the past, you basically have to be seen to be providing "value for money". And if you have two bids, one a fair bit less than the other, well you wouldn't get much of a prize for guessing which one would win!

This whole having to tender for bids is a joke from what my friend has said anyway and usually wastes more time and money than what it is actually worth. That is probably more than I am allowed to know let alone say, but lets say it isn't surprising the situation some councils have found themselves in.

At the local authority I worked at you had to get three formal quotes for any purchase over £3000 (IIRC) and give very good reasons if you didn't accept the lowest one. I spent a lot of time requesting and chasing quotes from my suppliers!
 

DarloRich

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The actual rules are fairly complicated from what I understand, but from what my friend who works for a local council has said in the past, you basically have to be seen to be providing "value for money". And if you have two bids, one a fair bit less than the other, well you wouldn't get much of a prize for guessing which one would win!

This whole having to tender for bids is a joke from what my friend has said anyway and usually wastes more time and money than what it is actually worth. That is probably more than I am allowed to know let alone say, but lets say it isn't surprising the situation some councils have found themselves in.

that's not right - you can almost take any quote as long as you are able to justify it. Cost isnt the only scoring factor.
 

Dai Corner

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that's not right - you can almost take any quote as long as you are able to justify it. Cost isnt the only scoring factor.
Yes, for larger contracts (£25,000+) we had to set out a scoring system based on set criteria and mark each bid according to that.
 

DarloRich

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I remember when I worked at a Local Authority for a while I had to tender for a print run of leaflets. I didn't even need that many (I think it may have been 500) but because of the value of that contract I had to go out to at least three different suppliers. Just for some leaflets...

Painful as it may seem to be it is a process designed to stop you taking a back hander of your mate Dave ( the Printer) to win the contract.
 

Red Dragon

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Carillion was born out of Tarmac. Back in the 1980s the company where my wife worked as a P.R. got it in their heads ..........................and eventually the idea was dropped. She felt her company had a lucky escape!

Yes your wife is quite right, and as a result the CEO of Tarmac (Neville Simms at that time) split the construction and quarrying parts of Tarmac, into Tarmac (quarrying and quarry products) and Carillion the construction company - preventing further takeover attempts.
You will see "Tarmac" wagons on the road and rails today but it's just the original name being used by CRH, an irish company, and is nothing to do with Carillion.
 

MotCO

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that's not right - you can almost take any quote as long as you are able to justify it. Cost isnt the only scoring factor.

It tends to be the 'best' bid that meets the specification closest. Cost does come into it, but it is not the over-riding factor. The tender should set out the criteria and how these are scored, together with weightings for each factor. It is a lengthy process, but is thorough and ensures fair play and should ensure 'immunity' from legal challenge.

We have come a long way from the early days of 'cheapest wins', and have learnt from our mistakes.
 

Marklund

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I remember when GTRM was known as Get The Redundancy Money.
Good luck to those who may not be that lucky to actually get any redundancy out of this shambles.
 

Kite159

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I work for CarillionAmey which as you can probably guess from the name is a joint venture. The liquidation of Carillion is having very little impact on us and the service we provide fortunately. I am of course very sorry for the many people who are affected by this though. It is us that do the MOD infrastructure repairs not Carillion as the BBC and other media outlets have been saying all day.

I'm in roughly the same boat, subcontractor to a partnership which was 50% Carillion so the next few days might be interesting to see what the other partner does in relationship to creating another partnership to do the building work & repairs to the MOD buildings.

----

I can remember a few years ago when a company which owed me some money (one of those "cash for old CDs" companies so was less than £5), the charges made by the administrators were a bit eye watering. Something like £80 an hour for a junior office assistant going up to £400 an hour for one of the partners to do work.
 

fowler9

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I'm in roughly the same boat, subcontractor to a partnership which was 50% Carillion so the next few days might be interesting to see what the other partner does in relationship to creating another partnership to do the building work & repairs to the MOD buildings.

----

I can remember a few years ago when a company which owed me some money (one of those "cash for old CDs" companies so was less than £5), the charges made by the administrators were a bit eye watering. Something like £80 an hour for a junior office assistant going up to £400 an hour for one of the partners to do work.
Well mate I hope all is well with you if you are involved with the situation. Not much I really can say on here about what I know (Which is very little anyway). I just know that it isn't just my office and that there is a whole supply chain involved.
 

richw

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They have also failed on their maintenance of accommodation of military personnel. Sub-standard work. I would n't mind seeing HS2 go up the wall, though:smile::smile:

My friend in military married quarters joked it appeared to be business as usual today. Carillion didn’t show up and did no work. My friend has been waiting on them to rectify a fault for 7 months on their kitchen!
 

fowler9

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My friend in military married quarters joked it appeared to be business as usual today. Carillion didn’t show up and did no work. My friend has been waiting on them to rectify a fault for 7 months on their kitchen!
My friend in military married quarters joked it appeared to be business as usual today. Carillion didn’t show up and did no work. My friend has been waiting on them to rectify a fault for 7 months on their kitchen!
They are a different company. Not Carillion.
 
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snowball

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A rather weak summary overall.

You do realise that Carillion contractors could choose when they got paid once the invoice was sanctioned?

They operated a form of self-factoring through their banks that allowed the invoices to be paid early, less the deducton of the interest chargeable between payment date and due date.

So say the "grunt" raised an invoice for work totalling £15,000 undertaken to 31st October (not every month is 30 days long) and submitted it electronically. By 15th of November, accounts payable would have verified that the invoice was in order and sanctioned payment by your choice of 60 days - 31st December.

The "grunt" could then make a business decision. Wait until 31st December for settlement of £15,000 or on say 20th November via the Early Payment Facility accept settlement of £14,958.90.

What would you have done?

Are you saying there's no truth in the reports of Carillion systematically enforcing 120 day waits that have now been on both PM and Newsnight?
 

jon0844

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How many big companies have you forced to accept your 14 or 30 day terms? Did the legislation actually come in to allow you to insist on it? I hope so... Maybe you just don't work (directly) for the Carillions of the world.

How many small firms can afford to take the necessary action to get paid on time, or get interest and costs, when they may then become blacklisted?
 

bnm

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They are a different company. Not Carillion.

That's as maybe, but you can bet that this seperate company will be looking to change its name pretty soon.

Whilst there is legal seperation that protects CarillionAmey from Carillion's liquidation, they are linked by more than just name. It's quite possible that charges and payments between the two, that can no longer be made, may affect CarillionAmey's bottom line.

The sentiment about CarillionAmey's management of MOD property maintenence isn't misplaced though. In many cases as bad as the worst slum landlord.
 

BestWestern

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The sentiment about CarillionAmey's management of MOD property maintenence isn't misplaced though. In many cases as bad as the worst slum landlord.

You have to wonder though, were they crap off their own back, or because their government contract dictated that they should be crap?
 

hwl

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You have to wonder though, were they crap off their own back, or because their government contract dictated that they should be crap?
I go for the later as it would ultimately cost the MOD less than actually doing stuff... (which would also match the MOD way of managing things while still in house)
 

mpthomson

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It doesn't really matter *that* much.

All they do is assemble and orchestrate a group of sub-contractors. The knowledge based contractors won't drop dead if Carillion goes bust, the grunt sub-contractors may experience some debt-management issues, but they will still be around one way or another.

It's a sad fact of modern business. Often when you start digging around, they are nothing more substantial than a Bitcoin.

It actually does matter 'that' much, mainly because of the amount of money they owe their subcontractors. A substantial portion are likely to go under as a result. Many have been on 120 day terms at Carillions 'request' for months, meaning that they won't be paid for any of the last 3 mths now. One small company on the radio this morning is owed £800k and they won't see any more than a tiny percentage of this, meaning he's likely to go bust, they've already laid off most of the admin staff.
 

mpthomson

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You have to wonder though, were they crap off their own back, or because their government contract dictated that they should be crap?
I go for the later as it would ultimately cost the MOD less than actually doing stuff... (which would also match the MOD way of managing things while still in house)

It's actually the former. The problem is that the contracts were never supervised and enforced properly. The contracts themselves are fine.
 

ainsworth74

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Painful as it may seem to be it is a process designed to stop you taking a back hander of your mate Dave ( the Printer) to win the contract.
Indeed but that doesn't mean I had to like all the extra leg work involved in ordering some bloody leaflets! :lol:
 

AndrewE

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It actually does matter 'that' much, mainly because of the amount of money they owe their subcontractors. A substantial portion are likely to go under as a result. Many have been on 120 day terms at Carillions 'request' for months, meaning that they won't be paid for any of the last 3 mths now. One small company on the radio this morning is owed £800k and they won't see any more than a tiny percentage of this, meaning he's likely to go bust, they've already laid off most of the admin staff.
Exactly. In the Guardian this morning (https://www.theguardian.com/busines...as-workers-face-pay-being-stopped-in-48-hours):
Small business experts warned Carillion’s suppliers could be driven under if they were not paid. Suzannah Nichol, chief executive of trade body Build UK, said she estimated Carillion owed money to between 25,000 and 30,000 businesses which could now struggle.

“Looking at previous cases where large contractors have collapsed, you typically see that around 17% or 18% of businesses who are creditors [...] don’t make it through the next five years,” she warned.
(my bolding)
 

talltim

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I've been wondering about the various service contracts that Carillion deliver for TOCs. For example does anyone know if Northern's Customer Experience Centre is open today?
Looking in through their window, staff seem to be there. There were also a lot outside smoking and talking animatedly
 

notlob.divad

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Indeed but that doesn't mean I had to like all the extra leg work involved in ordering some bloody leaflets! :lol:
The problem is not in the tendering, but the way that tendering is miss used by many organisations. In your example there is nothing stopping the organisation centrally going out to tender to place a long term contract with a supplier for all printed products over an agreed time period. With prices mutually agreed for different bands of quantities. This contract can then be re tendered at the end of the time period. Going out to tender for each individual run is incredibly inefficient on all parties and not really what the system was designed for. However it is often misused by companies in exactly this way who see it as a one size fits all model of procurement.

Finally to add my weight behind the falsehood that the result of a tendering process "must" go to the lowest bidder. It is entirely down to the purchaser as to how they weigh up the pros and cons of each tender submitted. It is very convenient for an organisation to say they need to save money so get it for the cheapest price you can, but that does not precluding those assessing the tender from flagging up where the bid does not meet the specification. If the level of detail provided does not give you insight into the suppliers ability to meet the specification, then the process has been flawed from the start.
 
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kingqueen

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Just being pedantic. A company cannot put itself into compulsory liquidation. If the company takes the steps it is a voluntary liquidation then if the directors cannot make a declaration of solvency the creditors take over the management of the liquidation making it a creditors voluntary liquidation.
Apparently, a company can apply to the Court for its own compulsory liquidation but it is very rare.
 

Wivenswold

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This is what happens when Governments put utmost faith in the private sector. It's a huge payday for the legal profession as every single contract they've defaulted on could result in a claim against Carillion's Directors and Officers.

This could well become the biggest claim Lloyd's of London syndicates endure if any of the senior managers at Carillon is alleged to have contributed to the downfall of the company.
 

DavidGrain

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There was a good article in the Financial Times yesterday but unfortunately the FT online seems to work on the principle of Read Once Only unless you pay them a lot of money. In it, it said that the reason for Liquidation rather than Administration is that there is nothing left worth selling. The only assets are contracts on such low margins that no one will buy them.Their basic business model was forward selling of labour work and betting on future costs. Not a sustainable way of doing business and no assets that a bank could lend against.

Those contractors who discounted the money that Carillion owed them, I hope had a no recourse deal with the bank otherwise they will have to pay back the money.

Many years ago a management guru listed five ways of spotting that a company would fail. One of which was: Does the company have a corporate helicopter? Soon after reading that book, I had cause to visit Tarmac House in Wolverhampton and saw a helipad just to the side of the drive.
 

DavidGrain

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Apparently, a company can apply to the Court for its own compulsory liquidation but it is very rare.

Thanks, I was thinking that they might have to ask one of the banks to apply to the Court to wind the company up. This might be a way of expediting the liquidation and protecting what assets might have any value
 
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