Awarding Major contracts in the Public Sector!

  spuds 12:43 24 Jul 12
Locked
Answered

Seeing the recent G4S multi-million pound shambles, and perhaps others over the past few years. Are these type of contracts being awarded or monitored properly, and should they be awarded to multi-national companies who might have a monopoly position in the market?.

As supposed cost saving exercises, there have been or are going to be contracts awarded to private companies, who will or are running public sector ventures with profits in mind. And quite a number of alarming facts appear, mainly poor performance or quality rated.

Police Forces are considering tendering out more of their services provided, yet I see today, that a joint police contract heading for G4S is now under concern by the three police forces involved, namely Bedfordshire, Hertfordshire and Cambridge.

What's your views?.

  Condom 13:14 24 Jul 12

When I was boss of a group of hospitals we were required to put many of our tasks such as cleaning, laundry, catering etc out to tender. The in house tenders were normally the best but that wasn't the message politicians of the day wanted to hear.

Today many of these services are now done by outside contractors and from what I know from old contacts most have suffered badly from the changes.

Even my local Town Council is now complaining that the County's privatised ground maintenance contract may very well lose the Town its status in the national Town in Bloom Competition as the contractor has let weeds and grass grow wild around the town. I'm about to send the local paper a photo of one of the towns welcome signs which motorists will find hard to read as it is almost covered in weeds.

  Strawballs 13:46 24 Jul 12

The over riding factor to who gets a contract is which company offers the said minister or person in charge of handing out contracts the best job offer after their term of office is over.

It would be interesting to see how many ex ministers ended up on boards of the privatised utility companies!!

  spuds 14:15 24 Jul 12

But do not utility companies as well as financial institutions and the like, have safeguards for the public by all the Watchdogs or Quangos 'that control them'?.

But when you look at the public sector, awarding the private sector, and a politician changes their allegiance, then is that not another matter, without public control?.

  interzone55 15:04 24 Jul 12

With the Olympics they wanted a single company who could recruit, train and manage the huge number of staff required.

I don't know many UK companies who could comply with that brief.

  oresome 16:24 24 Jul 12

The Public sector has no incentive to work efficiently, unless they are in competition with the Private sector.

The Private sector are motivated by profit. It's the only reason for such a business to exist and long term they have to at least meet their customers requirements as well as turn a profit to stay in business.

It's the case with many contracts that the companies bidding have little time to evaluate the work and the risk involved. Not surprisingly, they can get it wrong, put in a low bid, get the work and live to regret it.

When the contract comes round for renewal, they have experience of the contract, know the pitfalls and may have losses to recover. But they are faced with competitors who may undercut them by under estimating the task as they did initially.

You can see from this scenario that prices are driven down, but in an effort to make money, corners will be cut by the contractor if allowed by the awarding body.

  oresome 16:24 24 Jul 12

The Public sector has no incentive to work efficiently, unless they are in competition with the Private sector.

The Private sector are motivated by profit. It's the only reason for such a business to exist and long term they have to at least meet their customers requirements as well as turn a profit to stay in business.

It's the case with many contracts that the companies bidding have little time to evaluate the work and the risk involved. Not surprisingly, they can get it wrong, put in a low bid, get the work and live to regret it.

When the contract comes round for renewal, they have experience of the contract, know the pitfalls and may have losses to recover. But they are faced with competitors who may undercut them by under estimating the task as they did initially.

You can see from this scenario that prices are driven down, but in an effort to make money, corners will be cut by the contractor if allowed by the awarding body.

  morddwyd 20:09 24 Jul 12

It is not quite as simple as the cheapest tender.

In many public sector areas only approved suppliers may bid anyway.

For instance when I was in procurement for the MoD I could only use certain suppliers, even though in some cases I could have got the stuff cheaper.

  Condom 22:57 24 Jul 12
Answer

morddwyd

That is often standard procedure with many companies, not just the Public Sector.

When I was awarding contract for work, particularly building work,I would only arrange for the tenders to be sent out to "Approved Contractors". These were contractors with a proven record of performance up to specific levels, so a good contractor for say works at £100,00 would be unlikely to be offered work at £6 million.

There is good reason for this in that a contractor going bust half way through a scheme would result in a total cost well in excess of any approved sum to enable the work to be taken up by another contractor.

The cheapest tender is also not always the best value for money and so it it also normal practice to examine the two lowest tenders to ensure that everything has been costed properly to try and stop the very things mentioned by oresome

This thread is now locked and can not be replied to.

Surface Pro (2017) vs Surface Pro 4

Where HTML5 is headed next

MacBook Pro v Surface Pro 5