If a contract is let properly, it leaves little room for contractors to increase costs once their tender has been accepted. The problem with these schemes is that they haven't even got to the tender stage. Costs are estimated but then they have a consultation, and by the time that's done, costs have increased with inflation, so they revise the scheme to save money then do another consultation after which costs have increased again.

Fact. The longer it takes to start a project, the higher the cost. I speak from experience as a project sponsor who had the responsibility for ensuring value for money and as a multi million pound contract manager.
I presume a contract can be agreed with a clause allowing inflation to be considered as a factor over the agreed length of the project? It doesn’t seem particularly complicated to me.
There’s too much “convenient” flexibility written and agreed into these deals. The people calling the shots should be the public officials, not the contractors.
 
I presume a contract can be agreed with a clause allowing inflation to be considered as a factor over the agreed length of the project? It doesn’t seem particularly complicated to me.
There’s too much “convenient” flexibility written and agreed into these deals. The people calling the shots should be the public officials, not the contractors.
The contractor should be pricing their tender realistically to allow for current costs, expected increased costs over the contract period , and for unforseen costs, known as contingencies. This might cover unexpected issues such as the discovery of asbestos, although if there's a possibility of that, a survey should have been done. The problems arise where contractors bid too low in an attempt to win the tender. Usually this is due to them not including various costs that are likely to arise, such as out of hours working, security , or other issues. If the project QS and Architect just opt for the cheapest tender without spotting these omissions, it gives the contractor licence to print money if they then need to undertake these tasks - known as dayworks. That's why a good design team will not only crawl all over a tender, but interview the contractor in depth to ensure the contract covers everything. It will often even include penalties against the contractor for delays in reaching milestones or completion.

A weak contract leads to a poor and usually expensive outcome. However, we seem unable to even get to the tender stage! Design, cost, consultation, redesign, re-cost, consultation again, and now a possible redesign and re-cost again, no doubt leading to a further consultation. Its ridiculous, inefficient and expensive.
 
There’s too much “convenient” flexibility written and agreed into these deals. The people calling the shots should be the public officials, not the contractors.


The problem with that is contractors ie private companies tend to be smarter than public officials a good example is the RAF Wedgetail programme. The MOD ordered five radar sets from Northrop Grumman later reduced it to three and then discovered they were on the hook for all five at £60 million a pop.

It all helps the black holes they keep finding-HS2 anyone!
 
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The problem with with that is contractors ie private companies tend to be smarter than public officials a good example is the RAF Wedgetail programme. The MOD ordered five radar sets from Northrop Grumman later reduced it to three and then discovered they were on the hook for all five at 60 million a pop.

It all helps the black holes they keep finding-HS2 anyone!
I think some of the “black hole” money finds it way into the occasional account held by public officials.
I remember back in the 80/90s and it was discovered that the 4/5 largest contractors used to meet up before bidding for Gov work and agree a generally inflated cost and then which one’s turn it was to bid slightly under and win the contract.
Hospitals, motorways, all the big infrastructure was overpaid for by years and the companies were fined and allowed to continue biddding.
To show how much has changed, Fujitsu, who were behind the Post Office scandal, have won contracts for Gov work since it was exposed. They haven’t even compensated the victims yet.
It’s disgraceful, it’s immoral and , in my opinion, it’s corrupt.
 
Should have just built the road that was originally proposed and linked it to the ring road just below Horsforth Roundabout - this would have not only improved access to LBA but would have significantly improved the traffic at the roundabout….. instead as usual LCC stalled and decided on the rail link which will have questionable benefits….
Now years since WYCA published this and as usual zero progress…https://ehq-production-europe.s3.eu...e210999fec53791922e26c72a47b6cd6a263b92ca7f84
 
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