Discussion in 'The Quarterdeck' started by trehorn, Jan 15, 2009.

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  1. I am currently witnessing the MOD Procurement process in action for the first time. and i have to say i am absolutely disgusted.

    Obviously i cannot go into too much detail here at the moment but seeing how supposed partnership contractors work when the MOD is involved has left me completely aghast and if this is how every project works then the MOD should be ashamed of themselves for either;

    a) Allowing it to happen so blatently,

    b) being so stupid as not to realise that they are getting the p*ss well and truly taken out of them!

    Speechless doesn't even come close!!! :x
  2. Surely this post cannot be true.

    All the glossy magazines that arrive monthly tell me how good the procurement process is and many years of service past and present tell me it still is.


    Do not know what came over me, started to believe the glossys.

    Procurement, also known as a way to make lots and lots of money out of the MOD over a protracted amount of time as possible.

    Especially when the MOD buy equipment to meet a specific spec and surprise it does not and we pay more.
  3. Obviously this news is not ground breaking. I worked for DLO in the 90's. A task required the use of a cordless drill. Made the usual enquiries to the stores section, with the usual results. As this item was urgently required I made moves to get it local purchase from B&Q, where it cost about £35. No, management decreed that the ship would have to wait for it's stores, because a cordlees drill had been found in Scotland. Sure enough about a week later I had the said drill. The total cost of flying it down was over £300! Waste money? Pusser are past masters at it!
  4. Doesn't this happen in all walks of life though? Services that are contracted out tend to become more costly than the "in-house" option.

    Ive seen NHS contracts and Railway procurement, not a pretty sight. To give you an example from the NHS; a lift that operates to move medical records from one floor to another has broken down - the replacement part for the lift costs £75. This would fix the problem - but staff are told to ring through to Carillion (an FM provider contracted to do this type of work it costs the NHS hundreds off pounds in call-out fees etc but they choose not to resolve the problem.

    These types of contracts are all about draining money out of public services, nothing else.
  5. A army site on the south coast.

    The army was billed £107 to replace one light bulb, outside on an access control point. When I saw the bill I nearly choked on my coffee.

    Until the MOD in general get a grip on reality and these rip of contractors who charge ridiculous charges are got to grips with then procurements and external agencies will continue to rip off tax payers.
  6. Not so much the problem of MOD I'd've thought (though they are aprime example of massaging the costs) - more the Treasury's (Brown et al) for insisting that contracts go for 'competitive tender' !

    It has existed for many years now, and the rot is in.

    If one cares to look, this problem existed with the US Military many years ago where a normal hand torch was reported as costing the US taxpayer hundreds of dollars.

  7. Whitemouse has it. The directive extends well outside the MoD fence.

    Stores do not/did not get flown from Clyde to GUZ/Pompey.
  8. Having been a Dusty (but it was well before the rot set in), and worked with a private HGV company, and then with BAe supply for the RSAF (massaging costs is an art form there) - can I claim insider knowledge ??

  9. This is the scenario i have witnessed.

    Building to be constructed on MOD property.

    Well known organisation very used to ripping off, sorry, working for the MOD, design and price the job.

    Result: Vastly over engineered, over spec'd and design made extremely complicated.

    Then the price for the project is vastly over priced with ridiculously high contingency included "just in case".

    Some one outside the MOD see's the price and has heart failure. Ask's an independant consultant how much he thinks the building should cost. Suprise suprise his valuation is half the cost of the well known organisation.

    Other contractors price off exactly the same (really poor) drawings and specifications and come in less than the independant consultants estimate (less than half the well known organisation).

    Other contractors also highlight areas where tens, if not hundreds of thousands of pounds can be saved by minor re-design works.

    Suprise suprise, well known organisation manages to revise its quotation to somewhere around the projected build cost!

    The worrying thing is that nobody seems to be bothered that this company is working throughout britain on government property and is getting away with this to the cost of millions of pounds on each project.

    Please tell me where is the sense in using a building company which is related to the consultants who designed it?

    Why arent these projects issued for competitive tender?
    Why aren't they design and build so that the contractor takes on the risk?

    It makes me sick. Its not even the MOD's money they're playing with!
  10. I think any one who has been exposed to the MOD procurement system is quite aware that Smart Procurement as conducted by the MOD is about as dumb as it gets. I have also seen the current US system in action and yes it still has it's faults but it is streets ahead of anything here. Now companies make procurement mistakes too, but they do learn and and improve. We have seen the standard of contracted out services for example improve over the years as we have learnt both how to specify what we want and where real value resides. Also in industry we are doing a lot more aprtnership deals with suppliers which does mean that risks are shared and both sides of the partnership benefit from rreal savings. Schemes like that do also mean the plane you fly on is no longer made from parts all supplied by the lowest cost supplier.
  11. Not as a matter of routine, but it does depend on an effective contract and effective contract management to avoid custom and practice undermining the agreed service levels.

    That means paying for decent commercial lawyers, and decent contract managers; neither of which MoD is generally prepared to do. Similar issues across the public sector. I had one client who was unhappy that our negotiation approach was too aggressive and asked us to ease off on the competing potential suppliers.
  12. Surely the sensible way of getting the most from the money they have is do what most organisations who regularly build do.

    1. Appoint consultants (architect, engineer ect)
    2. Prepare employers requirments.
    3. Formulate a design which conforms to employers requirments.
    4. Appoint a project manager to issue and over see the tender process.
    5. Make the project design and build so as to ensure that the building is constructed to the clients requirements but with the majority of the risk being borne by the contractor.
    6. Select a list of recognised contractors and invite them to tender.
    7. Review the tenders and commence negotiations with the most competitive bidder/'s.
    8. Place an order and crack on.

    Obtaining only one bid is asking for trouble unless you are in a position to know approximatley what the costs should be. ie: you have built something very similar on more than one occasion, with different contractors previously.

    Asking the company who you intend to build it to also design it is a schoolboy error. It leaves the door open for them to over design/engineer it and over price it before then removing all the OTT bits and keeping the money.
  13. The real problem is that the MOD repeat stages 2 & 3 at regular intervals
  14. The consultancy fee's for this particular project had already exceeded £1 million.

    They haven't even put a bucket in the ground yet!!!!

    We estimated them at 3/4 of that figure to both tender and complete the project!
  15. Well this will make all the difference;

    Almost buried away on Page 5;

    So he's well qualified then!

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