Bidding for contracts due to Carillion's collapse

  • Published on: 13 February 2018
  • By: Frances Talman

In recent news, the collapse of the construction and outsourcing company Carillion has left many questions unanswered. Carillion was one of the UK’s biggest contractors for supplying support services to schools, hospitals, prisons and many more. Carillion collapsed during the first few weeks of January 2018, leaving 28,000 staff facing uncertain futures. But it’s not just the employees of Carillion that will be affected. Carillion customers are now having to consider their options to ensure completion of their construction projects or continuation of their support services. Customer responses have been varied and driven by what is feasible and practical:

  • Joint venture partners taking on Carillion’s commitments and workforce
  • Public sector departments setting up new government-owned companies to maintain service provision
  • Interim service solutions put into place until new suppliers can be engaged
  • Tendering for new suppliers to bid for services required

The uncertainty about the future of these contracts and how they will be managed, or re bid has caused a great amount of confusion, but eXceeding can help you make sense of the future plans that have been set out during this time.

So what went wrong?

Of course there are many reasons as to why Carillion collapsed, the huge amount of debt that built up, share prices falling and the poor finance model that was created which demonstrated that no one understood Carillion’s finances.

The HS2 high speed rail project was one of Carillion’s most high profile contracts that they were working on. Carillion was commissioned to design and build a 50-mile section of the high speed railway roughly between Aylesbury and Royal Leamington Spa. This contract was awarded in July 2017, which was when Carillion had already fallen into financial difficulty. For this contract, Carillion was part of a joint venture with Kier and Eiffage, for which all parties were forced to give assurances that if one of the partners were to collapse; the others could step in to deliver the work. Although for this specific contract, Kier and Eiffage are going to continue work as planned, other contracts Carillion held are likely to be put back out for tender which represents an opportunity for construction and service suppliers.

Carillion offered many outsourcing services to the public and private sectors, with a range of contracts to provide cleaning and catering to hospitals, school dinners, maintenance and operation of buildings and estates as well as security and housekeeping services.

Carillion held approximately 450 Government contracts involving the Department for Education, Ministry of Justice MoJ) and Ministry of Defence (MoD). Carillion had secured contracts worth £158 million to deliver facilities management services at more than 230 military sites across the north of England, Scotland and Northern Ireland, and two Network Rail contracts to upgrade infrastructure in the Midlands. Carillion’s peers have been given a huge opportunity from the companies collapse to gain some of its business.

Whilst formal arrangements are in place for many of Carillion’s larger contracts including rail, highways and construction projects there are many smaller opportunities for suppliers to bid for as services as they are re-tendered.

eXceeding’s consultants are available to support organisations in considering and responding all bids and tenders. Our professionals can ensure that you have the expert resource available to produce a winning, profitable bid response.

Contact eXceeding today to discuss your requirements on 0333 555 111 or email [email protected].