https://www.constructionnews.co.uk/c...027127.article


That situation probably came about due to this


https://www.constructionnews.co.uk/m...027117.article


............

Failure to pay reminds me of this old joke:

A boy was at a mental arithmetic class. The teacher put the following question to him:

"Your father owes someone £10000 and agrees to pay it back every month in equal instalments for a period of 10 months. After 4 months, how much does he still owe?"

"£10000, sir"

"Rubbish, boy - you don't know your maths. What's your name?

"Maxwell, sir - and you obviously don't know my father Robert!"

:hmm:

I was under the impression that we were indeed discussing the emoluments of the predecessor. I certainly was. Would you take a moment to reconsider your rebuke?

I think you are mixing your press barons there, BEags...

Perhaps there is a case here for someone to jump off a sinking ship.... or a luxury yacht if you prefer.

I think they would most certainly be given a helping hand Nutty.

Robert, not Rupert as you pointed out, Treaders!

Hypothetical question. Let's imagine that an aspect of RAF pilot training had been contracted out to an organisation, call it 'Airflite Training'. Airflite have been awarded a contract to start this training with everything in place for the first students on 1 Jan 2018. But they haven't been able to meet the contracted date, so MoD has had to find a short term alternative in order to train their pilots.

Let's now imagine that various training providers have responded and a contract has been agreed with one of them.

Bearing in mind the Government's refusal of a state bail-out for Carillion, who now pays for Airflite's failure? Their shareholders - or the tax payer?

Surely it should be the former?

All hypothetical, of course.......:hmm:

The answer to the question you posed BEagle is that all depends on the terms of the contract.

1. Does the contract stipulate time is of the essence?

2. Are there contractual penalty clauses for non performance?

3. Does the contract provide that in the event of non performance for any reason HMG is entitled to treat it as a breach enabling it to end the contractual arrangements?

My guess would be that if it is just a short-term delay, in the absence of express terms & conditions enabling it to do so, HMG would not be able to employ alternative contractors and recover the costs from Airfllite.

Who would have been stupid enough to have outsourced such a core requirement without there being non-performance clauses in the contract?

Don’t tell him Pike!

YS

Was the irony intended?

You can write the strongest most bulletproof contract in the world, but if you sign it with a company that is rapidly going down the tubes and goes bust with debts of £1 billion, you might as well have written it in sand for all the good it will do you.




...

Re#88 point 2.
I note from BBC News last night about the Liverpool hospital they were having to pay. £1.5m every month late. So far a year behind. No one is going to recover the penalty now!
Also wondering who will pay to complete the building. Not too much of a worry unless Carillion have been paid in advance.
I don’t fancy the job of having to unravel the mess and refinance any deals.
When companies get taken over (prior to any collapse) the new company should accept the liabilities as well. I know of cases in Defence where this never happened and we paid twice. I was always uncomfortable signing the 640s and would raise a note for my boss to sign to cover my arse.

Just read that there may be some justice in the Carillion debacle, apparently in the event of the company going bust the men in big suites have a contract clause which means they have to give any dubious money back.............!

"Carillion introduced the “clawback” provision as part of its pay policy in 2014 that would allow the company to demand executives return cash and share bonuses for up to two years after payment – a move it said brought the business in line with the updated UK Corporate Governance Code"

OH NO! .........You are not going to believe this but reading the article further, by an amazing coincidence the carillion remuneration board subsequently changed the rules on this so that "wrongdoing" has to be proved before ill gotten gains have to be returned! Who would have believed it?

Still its good news for manufacturers of Pig Troughs, Snoughts for the use of!

One also wonders how many brown envelopes were floating around the government.

Seems Capita is also struggling. Not to the same extent as Carillion given its cash reserves, but it does beg questions about the principle of the private sector being better placed to provide public services.

I seem to recall that M.P.B.W. weren't held in the highest esteem, though ;)

Having written a contract with measurable outputs and performance criteria, commercial thought it overly complicated and relaxed the requirements and removed the measurable criteria. Were they being realistic knowing penalties would not be paid or as an effort to reduce bid prices?

MPN11, I don't think that the Ministry of Public Blunders and Wonders went bankrupt though?

Biggest expense was probably repainting the logos on all their vehicles every time they changed their title....Ministry of Works...MPBW...Department of the Environment......Doomwatch??

But the Insolvency Service would overrule any internal contract and their directorships wouldn't be protected if the IS can prove they were trading insolvently which it looks like they may have been. If they carried on trading when they knew they couldn't cover the bills then they can be fined/banned etc.