Thursday, May 01, 2008

Ministry of Indefensible!

Why did the Ministry of Defence opt for a "cost plus" scaffolding contract rather than a fixed price deal!?!

It would then have avoided any possibility of fraud and offered the taxpayer better value for money too!

"It was an environment which was ripe for printing money but they did not have to print money." - Judge Nicholas Loraine-Smith


Mark Wadsworth said...

Somebody once pointed out that the defence industry is the largest socialist economy of all.

Bag said...

Properly managed cost plus is acceptable. Cost plus is simple defining a fixed profit. Cost plus 15% or something. An agreed figure. It's basically what you do when you walk into a car or DIY kit rental shop or engage a plumber or electrician. Not everyone will work on fixed price projects. Builders do it all the time and you don't hear about their projects being triple the original costs.

However in government hands cost plus is poorly managed and the requirements are changed on political whim. That happens on fixed price projects as well and causes them to be renegotiated anyway. I wonder what the competition is like then. Oh wait! I know that one, there is none.

Bad specifications plus bad management multiplied by political interference means you won't get a good deal whatever you choose.

So private venture and cost plus projects are fine, in general, and government and any project is overspent, in general.

It needs a massive hange in government attitude to correct and cost plus is just a tool. One to be blamed rather like the bad workman.