Interserve

Not sure about what Carillion did but Interserve have contracts in the Middle East and the PJOB's. Things happening in the UK, people wait at the gates to see if they turn up tomorrow. Abroad its a little different. The thing with the defence contracts is the equipment and infra is all MOD owned. Interserve just provide the manpower to operate/maintain it. So i think the problem is who will pay the guy that runs the power station or ensures the water treatment plant is treating water tomorrow? If i was the MOD, or more specifically DIO, i would be seeing who else in the FM world is waiting in the wings.
 
Am I being cynical but have the big companies like Interserve and Carillion have a plan to basically pack up and eff off leaving the contracts dead, with very little penalty when they can't financially rape the NHS and others any more?
What makes you think they’ve financially raped anyone? They are / were the counterparty to a contract that the NHS tendered amd let. That contract clearly describes both parties responsibilities and the payment terms. The company responded to the tender in good faith, and submitted a binding, complaint tender.

It’s the client side that writes the contract, not the contractor. Fact is that bad contracting brings bad outcomes.

And why on earth would a company deliberately go bust?
 

mercurydancer

LE
Book Reviewer
What makes you think they’ve financially raped anyone? They are / were the counterparty to a contract that the NHS tendered amd let. That contract clearly describes both parties responsibilities and the payment terms. The company responded to the tender in good faith, and submitted a binding, complaint tender.

It’s the client side that writes the contract, not the contractor. Fact is that bad contracting brings bad outcomes.

And why on earth would a company deliberately go bust?
Yes, bad contracting brings about bad results. Carillion did financially rape the NHS, due to that reason.

The rest of it Bob, was a question from me. Is it a business plan to fold? Deliberately go bust if a contract cannot be fully delivered? Possibly with the help of govt support? I am far from being an expert which is why I asked a QUESTION. Unfeasible bids for contracts al la Virgin north East?
 
Yes, bad contracting brings about bad results. Carillion did financially rape the NHS, due to that reason.

The rest of it Bob, was a question from me. Is it a business plan to fold? Deliberately go bust if a contract cannot be fully delivered? Possibly with the help of govt support? I am far from being an expert which is why I asked a QUESTION. Unfeasible bids for contracts al la Virgin north East?
I don’t think Carillion did financially rape the NHS. The evidence is in their accounts; their net profit ratio never exceeded 10%; they weren’t profiteering. Interserve’s margins are similar. They bid and win government contracts on low single figure margins because that is the only way they will win.

To make matters worse, the requirements in the tender will invariably be a gold plated wish list that doesn’t bear any resemblance to the budget available. So the contractor signs up to something that can’t be delivered for the contract price. The tender process makes it impossible to value engineer the service to match scope and quality to budget because it’s all set in concrete before the contractor is on board.

It’s a crazy world that attracts a limited array of companies and those it does attract are specialists in milking contracts. If they weren’t they’d go broke sooner. There’s are good reasons why the likes of Carillion, Intereserve and Capita do / did very few non-public contracts. Businesses tend to look for value when investing, not price.

To answer your question, companies only exist to create shareholder value which they do by paying dividends and growing their share price. By going bust or restructuring in the way the Interserve are attempting, they destroy shareholder value. No one wins; shareholders loose their money, debtors taken haircut. There’s no logical reason why a listed company would deliberately go bust.

Personally I think this situation has its root causes in the Blair government’s debt binge. When that blew up, austerity squeezed margins to the a level where the contractors couldn’t sustain the debt necessary to finance these big contracts. The other major issue is European public procurement rules which promote adversarial contracting and prevent value engineering.
 
The Interserve rescue plan is up fo the vote today.

UK outsourcing giant faces crunch vote
Interserve: UK outsourcing giant faces crunch vote on rescue plan
If shareholders fail to back the debt-for-equity deal, the firm could go into administration by the weekend.

That [the rescue plan] would hand lenders the lion's share of the firm, and existing shareholders would be left with heavily watered-down shareholdings totalling just 5% of the firm's worth.


The largest single shareholder has opposed the plan, sdomewhat unsurprisingly, and it looks like Interserve has a good chance of going tits-up later today.

As well as MOD facilities management, Interserve are deeply into FM for hospitals, schools and the probation service as well as being involved in several major infrastructure projects.

Effectively, Interserve are "too big to fail" and will have to be bailed out by the government.
 

Blogg

LE
The Interserve rescue plan is up fo the vote today.

UK outsourcing giant faces crunch vote
Interserve: UK outsourcing giant faces crunch vote on rescue plan
If shareholders fail to back the debt-for-equity deal, the firm could go into administration by the weekend.

That [the rescue plan] would hand lenders the lion's share of the firm, and existing shareholders would be left with heavily watered-down shareholdings totalling just 5% of the firm's worth.


The largest single shareholder has opposed the plan, sdomewhat unsurprisingly, and it looks like Interserve has a good chance of going tits-up later today.


As well as MOD facilities management, Interserve are deeply into FM for hospitals, schools and the probation service as well as being involved in several major infrastructure projects.

Effectively, Interserve are "too big to fail" and will have to be bailed out by the government.
And to the surprise of absolutely nobody, 60% of shareholders reject "offer", shares suspended, into Administration and end up being sold to lenders.

Who will break up and sell bits on ASAP.

Dead hand and deep pockets of HMG (i.e. taxpayers) will inevitably once again be in the background.
 
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ugly

LE
Moderator
If it goes tits up, the DIO Estate is buggered. No one to cook, clean or maintain large swathes of it.
It doesn't matter tupe means they stay in with employment protection until a new company takes over and they get to negotiate new terms. Happened with Carillon at TfL, sadly the troops lost all of their carilion pensions less what the govt guaranteed as Cleshar who took them over weren't in the scheme!
 
I was working for Interserve on a mil contract. I left after 2 months. I was miss-sold the role and the way it runs the contract in the area i was in i considered it at risk from serious failure. I highlighted this in my resignation letter which resulted in them trying to keep me. Using inexperienced and poorly qualified personnel highlighted by employment from a specific country did not help but then they would not be able to pay those wages to those from the UK for instance. DIO are seriously unaware of what they are getting away with. Hopefully whoever replaces them sorts it out. But as i have mentioned previously, DIO in this specific area need to stop sitting behind desks and get SME's in to do proper contract managment and not rely on the self ticking boxes on PPM documentation the Contractor gives them!
 

Blogg

LE
Those with a sense of morbid curiosity may spend a few moments on GOV.UK Contract Finder.

Plug in Interserve. Filter by Opportunity, Awarded and filter by Latest Awarded date.

Up pops The Provision of Patient Discharge Services for NHS Shared Business Services, which Interserve Healthcare is one of the suppliers to.

Closed 10/12/018.
Contract Start Date: 08/03/2019

That went well
 
Just checked out our company internal project database, and thankfully we have no payments outstanding as we're one of Interserve's sub-contractors.

However, we were bidding for several decent sized (to us) MOD contracts which will now doubtless be delayed / we'll have to re-quote etc etc.

Had the same happen with Carillion :(
 
Just checked out our company internal project database, and thankfully we have no payments outstanding as we're one of Interserve's sub-contractors.

However, we were bidding for several decent sized (to us) MOD contracts which will now doubtless be delayed / we'll have to re-quote etc etc.

Had the same happen with Carillion :(
Funny up until yesterday Interserve's Linkedin feed was letting everyone know that they were winning tenders left right and center. The comments were funny as they of course mainly were not saying "well done"!!
 
Two thoughts.

First one. The core issue is the way government outsources. Big contracts with big, complex reporting and billing deliverables that cost the earth to bid and win yet squeeze the pips out of the contractor on price.

The likes of Interserve, Carrillion, Serco etc etc often bid at prices which cannot be profitable, certainly when the cost of bidding is considered. As a result, there’s no money to invest in delivering the service and they simply become an administrator for multiple levels of (not very good) subbies which builds in costs. None of them self perform work because they can’t afford too. And they have to price gouge to recover. It ain’t clever.

Second thought. Interserve didn’t start life as an engineering company; it started as a Thames lighterage business and diversified first by acquisition of a civils contractor with a focus on docks etc. It never has had an engineering services background and has expanded outwards to do so. Capita and Serco are similar; they diversified out of non-engineering sectors into soft FM and then onwards. Is it any wonder they stuff up big, complex things when they don’t have the long developed core capacity.

There aren’t many engineering business surviving in this sector because the can’t compete on price. Yet the client is entirely price driven.

A side observation; Interserve’s ancestor Tilbury made some very big contributions during both World Wars.
I had some dealings with a shop fitter called Whittle Contracts, they refused to pay when due, about £65k.
I put a winding up order on Tilburys who owned Whittles. Day of the court hearing, FD of Tilbury called my office and apologised for Whittles behaviour and next day payment was made in full. Tilbury were good guys.
 

Blogg

LE
FFS this is taxpayers money being pissed away, disgraceful
Not as such although the Value For Money of such things are always iffy

All the assets of Interserve plc were immediately transferred to a new entity, Interserve Group, which was established by creditors. The old Interserve plc crumblled to dust and shareholders got wiped out

Effectively it runs on although not as before but with it now being owned by the banks which were owed a shitload which could not be repaid
 
They will stay on as there is not budget from the MOD to do anything worthwhile and what they do is wasted. DIO dont have the expertise in some of the areas to manage them so free ride for them.
 
Not as such although the Value For Money of such things are always iffy

All the assets of Interserve plc were immediately transferred to a new entity, Interserve Group, which was established by creditors. The old Interserve plc crumblled to dust and shareholders got wiped out

Effectively it runs on although not as before but with it now being owned by the banks which were owed a shitload which could not be repaid
Not as such although the Value For Money of such things are always iffy

All the assets of Interserve plc were immediately transferred to a new entity, Interserve Group, which was established by creditors. The old Interserve plc crumblled to dust and shareholders got wiped out

Effectively it runs on although not as before but with it now being owned by the banks which were owed a shitload which could not be repaid
Its the head long pursuit of selling everything off and then paying over the odds for shit service that gets me, jobs that are done for shit pay on shit T&Cs that years ago would have been done by a serviceman/woman/inbetweener who at the end of the day could be deployed or had a TTW role
 
They also take advantage of cheap labour by recruiting St Helenians who do not have the experience or quals to carry out the task.
 

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