Carillion – a scandal at its core, not just at the margins

25th April 2018

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THE well documented demise of Carillion has clearly illustrated their flawed tendering methodology of using incomplete tendering documentation and design information was high risk in the extreme.

As we are all aware, the construction industry is a competitive marketplace with many contractors operating in a low margin environment.

From our extensive industry experience of working with the vast majority of the top 50 contractors in the UK, a well-structured and clearly defined tender preparation process is utilised, which involves investing in accurate, complete and robust bills of quantities.

Soben’s Chairman Paul Moultrie commented “Our Mission at Soben is to ‘Maximise Contractor’s Profits’.  Our senior team have all come from a contracting background, and our bills of quantities service is geared to fulfilling our Mission by assisting our clients to prepare accurate tenders that provide value for money for their clients in a robust and competitive market place.

In some instances, the failure of Carillion to use industry good practice by adopting accurately prepared bills of quantities, probably prevented them from submitting realistic tender prices for some of their projects.”

The key is to avoid having a howler on the books

Carillion went into liquidation early in 2018 after issuing a series of profit warnings and facing a ballooning debt pile.

Tony Williams of Building Value Ltd, said: “The key is to avoid having a howler on the books.”

Other observers argue that following one of the biggest corporate failures the industry has seen in years, the industry cannot afford not to utilise best practice.

A number of Soben’s clients have observed that poor corporate governance can put thousands of livelihoods at risk and can threaten to derail crucial infrastructure projects.

Carillion’s downfall has raised fundamental questions about the way their tendering processes resulted in erroneous tender values.

About Soben

Soben is the UK’s leading provider of bills of quantities to the contracting industry.  With offices in London, Manchester and Glasgow and a team of 70 surveyors we have prepared bills of quantities for projects valued at over £10BN in the last 12 months alone.