Hello All,
in all seriousness , the compulsory tendering out of all contracts will inevitably lead to corruption , partly due to there usually being little real competition due to a host of local factors.
42101 A End's comments about the local garbage truck operator actually highlights the problem. As is pointed out, the legal requirement is to provide new OTTO bins meant the existing, and very satisfactory, contractor, got dumped for the lowest cost contractor who , in reality was not interested and did not expect to win . So the result was the community lost a good service for a bad one , the local operator probably laid off staff , may even have closed down , and what will happen with the next contract ?
The other problem is total cost of projects over a number of years. for example, when VicRoads did the works with a mixture of their own staff and contractors , value for money was generally achieved. This is not the case now , as every Project is a separate contract.
So if you need to upgrade your traffic lights for example, each project is stand alone , therefore each successful tenderer has to buy in the requisite supplies, which includes special cable sold by the reel . The project does not require a reel , and the tenderer does not require more than a reel , so the cable supplier charges for a reel, and will advise when the reel is ready to collect.
The manufacturer will only make the cable to order as traffic light cable is unique to traffic lights , there is no point in making, say a dozen reels if your actual sales will be less than that. Therefore the manufacturer will adjust product output to suit actual demand, which is not known until someone rings up.The result is that the cost per reel has risen substantially , as all risk is now bourn by the manufacturer, and the contractor is potentially stuck with leftover cable that may, or may not get used ( eventually ) , that costs everyone involved money, and that is reflected in the final cost of the project.
When VicRoads did traffic lights, it knew what demand for next year would be, so it arranged a deposit and collect contract, the manufacturer made the number of reels required , and collected the balance when the reels were collected. This meant that VicRoads got a set price for next years demand, the manufacturer got a deposit , and then received full progress payments as the reels were collected . The manufacturer knew exactly how much cable was required and could adjust production to suit the schedule. Therefore the costs were managed and everyone was happy, and the price was good because everyone involved knew exactly what to expect.
The other downside is that short term contracts mean that the successful tenderer has to be sure they make a decent profit because they know that they probably will not get the next tender from that Council , and therefore need to ensure that any resultant wastage costs are covered in advance. Any wastage will doubtless end up in the tip as storage costs for leftovers is expensive , and they may not be able to use up that leftover in any future contract. ( If you doubt this , ask a builder what happens to left over roof tiles , which are supplied by the pallet load , so leftover is guaranteed. )
The long term effect of this is to reduce competition as the smaller tenderers gradually get forced out , cheapest tenders frequently get accepted , so quality inevitably goes down ( never mind the quality, feel the width, and it is cheap ! ) , and the community gets left with substandard results.
This is not a new phenomena , it is why Councils ( and State Governments ) for decades did a lot of things in house , as it was value for money over the long term. President Harry S Truman was once a local mayor supported by the notoriously corrupt Pendergast machine. When challenged as to why road construction contracts went to a non Pendergast affiliated company which charged a higher price , Harry responded that on inspecting the new contractors previous works, he decided that they were a higher quality provider and better value for taxpayers money.
Pendergast did not like that answer, but kept backing Harry as he was the only person prepared to say what he believed, and Pendergast did admire that. When Pendergast eventually died with a ruined reputation, Harry, as Vice President, notably attended his funeral, pointing out that Pendergast had always backed his candidacy over many years and had not interfered or influenced his decisions. ( Many of Pendergast's "friends" and "associates" were notably absent. )
This is not an argument for no contracting , but it is an argument for a mix of in house and contracting , an a desire for Governments to be prepared tp pay for a better product that lasts longer. Cheapest is not always the best , and the best is not always the most expensive , ultimately , this is what professional Public Service staff are paid to do, try and achieve a quality and value for money outcome with a process that is transparent , and in which decisions are based on valid assessments , and not the whim off a compromised individual.
Regards, Radioman.
