How can councils justify this?

ubersonic

ubersonic

ubersonic

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I have a friend who works in the council (not specifying which one obviously) and we were chatting over lunch and this came up lol. The council have a contract they put out every few years for servicing/maintaining all the air conditioning units in their properties (leisure centres, offices, schools, etc), and they have chosen to award it to the company that put in the lowest price (makes sense so far).

It turns out the company that has won this (major) contract is a man in a van who's been in business 10 months, has zero experience with contracts like this, and who's biggest AC job with the council thus far was a botched installation that had to be transferred to another company to fix. Then it gets good (lol), the price they put in is lower than it costs to do the contract (the council officers know how much this costs) which means the guy is either going to skip/bodge some of it or go bankrupt partway through the contract.

Yet despite all this the bean counters are giving themselves a nice pat on the back over the money they have saved (haha). I just don't understand how councils can justify this type of nonsense, it's not even incompetence as the officers know this is a mistake and going to end badly, they just can't avoid it due to rules/red tape.
 
If the drive is to save money and you work in a narrow minded culture then you look for the quickest result. This is a microcosm for the way our society has gone. A total lack of town planning, skills training for our young, jobs for life etc. The days of the visionaries and nation builders are long gone.

It's also a lot easier to do this kind of thing when it's other peoples money.
 
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The "justification" is simple: cut costs.

This is what happens when cutting costs is the goal rather than one potential tool that might be useful as part of a plan to reach the goal. It doesn't even matter when it doesn't cut costs and in fact increases them because when the goal is to cut costs people will be judged on how much they cut costs at any given point in time, not on the extra costs incurred later as a result and not on the damage done to the organisation or business. That's inevitable when cutting costs is made the goal and thus given a higher priority than anything else.

In the example you gave, the bean counters are giving themselves a nice pat on the back because they have achieved a higher score on the thing their performance is judged on and that's all that matters. People have to work on the basis of what they will be judged on. You're right to say it's not incompetence. They're doing the job they're told to do and doing it well. The problem is that the wrong goal has been set, not that people are being incompetent in working towards the goal that has been set.

It's not just councils. It's endemic in businesses as well. Same goal set, same results. Unsurprisingly. A person might assume that it wouldn't happen in a business because it reduces profits, but a person who thinks that is wrong. It can happen through incompetent leadership (unintentionally setting the wrong goal) or through considered self-interest in leadership (knowingly setting the wrong goal). In the latter case, the person making the decision knows that profit will be reduced and that the business will be damaged or destroyed but decides that they can use their success in cutting costs to enhance their career prospects and move to another business afterwards. Since the culture of cutting costs ensures that people at any decision-making level are judged primarily on cutting costs, this is a sound career plan as long as person can successfully blame the deterioration of the business on something else if the question ever arises (which it probably won't - this person is "good at their job" because they cut costs, so obviously it can't be their fault that the business deteriorated).

It all stems from a culture of having cost cutting as the goal rather than as one potential tool that might be useful as part of a plan to reach the goal and it follows inevitably from doing so.
 
ubersonic said:
I have a friend who works in the council (not specifying which one obviously) and we were chatting over lunch and this came up lol. The council have a contract they put out every few years for servicing/maintaining all the air conditioning units in their properties (leisure centres, offices, schools, etc), and they have chosen to award it to the company that put in the lowest price (makes sense so far).

It turns out the company that has won this (major) contract is a man in a van who's been in business 10 months, has zero experience with contracts like this, and who's biggest AC job with the council thus far was a botched installation that had to be transferred to another company to fix. Then it gets good (lol), the price they put in is lower than it costs to do the contract (the council officers know how much this costs) which means the guy is either going to skip/bodge some of it or go bankrupt partway through the contract.

Yet despite all this the bean counters are giving themselves a nice pat on the back over the money they have saved (haha). I just don't understand how councils can justify this type of nonsense, it's not even incompetence as the officers know this is a mistake and going to end badly, they just can't avoid it due to rules/red tape.
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i doubt that is true tbh.

you can't just tender it out to anyone. they have to be on a list.

as in if i wanted to buy a USB headset i have to use a specific company. i can't just go to any pc shop or amazon. regardless of if the list is 10 times as expensive.

if it is true then it's probably senior management at fault. they will have pressed for them to go with the cheapest no matter what to make the senior management look good on paper. as in look how much i saved us this year compared to last year. it will result in said senior manager getting a nice bonus and probably a promotion. so by the time they find out he didn't save anything he is no longer there to get the blame.
 
Psycho Sonny said:
i doubt that is true tbh.

you can't just tender it out to anyone. they have to be on a list.
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If the value is particularly large it has to go out to tender.

To OP, does this cowboy know someone at the council? Here at Stoke Council (biggest joke in UK), they have people they know do certain jobs and many allow set ups for jobs when they leave the council/councillor role.
 
Hopefully they do some form of due diligence during the initial stages of awarding a contract, that or some for of assurance during.

Knowing my local council however, it will be probably be neither.
 
this is how councils work. my sister has told me some of the procedures like this at Gateshead council, it's a 'ing joke, and not a funny one either.
 
what position does your friend have in the council and how is he linked to the tender process in this case?

I've heard similar stories about projects I've been working on directly for businesses and it's all been fantasy and hearsay
 
Suspect they have a rigid tendering scoring policy that they have to stick to. Price will be weighted at, like, 75% of the decision, and there will be no 'common-sense' override.
 
Okay the guy has been in business 10 months, how do you know he's not got multiple years experience under employment elsewhere?

Also its not uncommon to low ball on the contract and make costs up elsewhere (parts, callout etc)
 
One important thing to understand about the world, is that a lot of people in positions of responsibility/in charge of things have zero idea what they are doing.
 
cheesyboy said:
Suspect they have a rigid tendering scoring policy that they have to stick to. Price will be weighted at, like, 75% of the decision, and there will be no 'common-sense' override.
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Exactly that.

We had a tender go out for some work and the finance bods gave costing an 80% weighting or something silly. I think they had to get an exception put in place as the company that was on track to win basically wouldn't have been able to deliver anything close to what was needed, but they'd have won because of the price they gave.
 
MookJong said:
If the drive is to save money and you work in a narrow minded culture then you look for the quickest result. This is a microcosm for the way our society has gone. A total lack of town planning, skills training for our young, jobs for life etc. The days of the visionaries and nation builders are long gone.

It's also a lot easier to do this kind of thing when it's other peoples money.
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Exactly this

They've had to make "savings" because of central government cuts. But most have already cut everything to the bone.

This is the type of thing that lets you show "savings" on the budget sheet.
 
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