My company is not called Carillion!

by Graham Dodd on 02/03/2018

Last month when the sad demise of Carillion was confirmed, LinkedIn was flooded with theories as to why.

Bad senior management and tender submissions were two common suggestions and I generally agreed with both theories, though possessed no facts to support that.

I was so, so tempted to respond at the time, but, being in the midst of submitting two public sector tenders, decided to delay publishing my thoughts.

A month or so on, having withdrawn from one process but won the other, I feel well placed to comment.

Public sector door drop activity is just one of our numerous speciality areas and we enjoy working relationships with councils of all sizes across the UK.

We have developed a style in responding to tenders that we think serves us well, but, price is always an issue.

It’s typical for such tenders’ award criteria to prioritise price over quality, with a 60%/40% split quite common.

That effectively translates into – we are looking to appoint a supplier who can provide the best possible service, but aren’t really prepared to pay for it.

Our winning tender submission obviously pushed all the right buttons, but the other process became a teeth pulling exercise.

A complex procedure, made us wonder in the first instance how some of the questions even related to pushing a magazine through residents’ letterboxes.

Then we came across what was described as (one of a number) of pass/fail questions dependent upon which box you were about to tick.

But one question posed negated the contract specification driving the tender process?

A submission to the portal pointing this out was acknowledged by a generic response.

24 hours later, a notification of a message in the portal alerted us (and everyone else tendering who presumably at that time had not spotted the glaring error!) that the format of the question had been changed!

So, on we ploughed, answering countless questions, some of which appear to overlap with each other, until we reach price.

Now bear in mind, this is a 2 year contract, with a 2 year option to extend – at the Council’s discretion.

But, suppliers are asked to guarantee a door drop charge for the next 4 years!

Not possible, so back we go to the portal posting our thoughts.

Same response process as above, question is again modified.

But, modification now demands a guaranteed 2 year price (no problem), but a maximum price for the next 2 years, which the successful tenderer cannot negotiate on at any time during the contract period.

Back we go again and pose the question that that no supplier can be certain of their direct costs in 2021 now – and is that a reasonable expectation for what after all is only an option period?

Response directs us to links which they suggest help us to estimate direct costs in 2020/21.

Sorry, time to walk away.

I recall a senior executive at one of Carillion’s competitors being interviewed at the time of the demise and being asked if his company was prepared to take on their projects, at the charges quoted by Carillion.

He smiled and said “my company could submit its own loss making tenders if it wished to, which we don’t, so why should we take on anyone else’s?” – fair comment.

I don’t know if the fault in my story lies with procurement – who rarely in my experience know anything about the science of door drops – but that’s what I suspect.

Quality does have a financial value.

This experience has done nothing to change my view of procurement and good luck to which ever of my competitors wins the business.

A small thank you for pointing out two glaring errors in the tender would be appreciated.

This article was written by...

– who has written 54 posts on Letterbox Consultancy for Door Drop Marketing.

Graham Dodd is the founder of The Letterbox Consultancy - he has over 40 years of experience in the door drop industry and remains at the forefront of innovation in the business.

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