Like some others here, my interest in this is about SAR provision. The background going back 11 years indicates a few downward pressures on costs that may have helped bring things to this stage.
IIRC, back in late 2012, fellow incumbent contractor CHC were dropped from the competition because they were 20% more expensive than the cheapest bidder entering the final stage.
The present contract started with a baked-in remuneration problem, as indicated here by both Crab and I, in that Technical Crew Members were on pay scales very different from the MoD Professional Aviator Scales they had experienced in a former life. The new regime did not properly reflect "who is taking all the risks in SAR" as I think Crab put it.
During the early part of the contract, the Bristow Group Inc quarterly results, documents given almost religious significance in the American finance world, were lies. For instance, investors were fooled by being told that purchases like new SAR aircraft would be far later than were necessary for contract compliance. Then the inevitable happened.
During the Chapter 11 bankruptcy episode, one of the most important things that saved Bristow Group Inc was that a subsidiary had a contract with a monetarily sovereign government that was writing them a big cheque every month. Not the only thing that saved them but highly significant. The value of those UK SAR jobs had never been so great.
The contract cost structure was designed by the DfT to prevent the CONTRACTOR from making decisions about SAR tasks on cost grounds (informant: Director Aviation, MCA). That structure was never designed to prevent the CUSTOMER from manipulating the contract output on cost grounds.
The present contract fixed price part was £1,600,497,465. The new contract starting in October, has a fixed price part of £1,959,355,159, that being an increase of 22.4%, when ONS numbers tell us that inflation has been 32% across the period, and FW and UAS are now included (although fewer and cheaper rotorcraft are to be used). The contract competition closed some months early after at least two competitors saw the light and decided they could not compete with the incumbents numbers.
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Last edited by jimf671; 8th May 2024 at 17:16.
Reason: grammar