Annual report and financials

[Mr Brightside]

1 hour ago, Jamboelite said:

I’d suggest that one person has overall oversight of budget and overspend  and that would be AB no ? 
 

I dont really get people moaning because some people for asking some reasonable questions about how the £20.68m cost FF noted was accumulated.

 

I’ll say that again £20.68m cost, coming from a club that has our recent history isnt something that should just be a shrug of the shoulders.

 

No one says there has to be a public flogging, the cost for all the work done might be perfectly reasonable but we did use club funds for some of this that MIGHT have been used in on field matters.

 

Its called transparency and should be something we as fans should all want.

 

Im sure the AGM will cover some of it.

The issue with overspend / true cost has arisen for 2 reasons.

 

1) Poor cost estimates from architects/ project manager/ QS.

2) Not engaging with a main contractor in an attempt to save money.

 

 If the project was tendered to main contractors then the club would have had a firm price before  starting the works and this would have shown up a discrepancy in the cost estimate. At this stage the project could have scaled back/ scrapped or additional funding sought.

[Footballfirst]

20 minutes ago, Mr Brightside said:

The issue with overspend / true cost has arisen for 2 reasons.

 

1) Poor cost estimates from architects/ project manager/ QS.

2) Not engaging with a main contractor in an attempt to save money.

 

 If the project was tendered to main contractors then the club would have had a firm price before  starting the works and this would have shown up a discrepancy in the cost estimate. At this stage the project could have scaled back/ scrapped or additional funding sought.

That's a fair assessment.

 

A question I would have is whether AB's previously stated desire to provide quality finishes to the lounges, toilets etc., has in fact increased the costs substantially from the original spec.  If that was the primary reason for the increased spend then you would hope that the expected return on investment would justify the cost. If it doesn't, then the redevelopment will  be rightly viewed as a vanity project or what AB sees as her legacy.

 

My personal view is that the increased spend was more down to poor estimating from the outset and that materials, construction and fitting out costs were always going to be higher than planned.  The investment in the upgraded pitch, rather than resurfacing is a new cost, but I can't see AB's improved spec being the biggest element in the increase.  We may hear from AB at the AGM that costs such as the new plant room, new boilers, replacing the undersoil heating system, CCTV upgrades etc. were not in the initial spec. 

 

There is always a requirement to incur capital expenditure to upgrade or replace plant, fittings or equipment, for which the club would have to pay year on year. It may that this routine expenditure is just being lumped into the Redevelopment Project, so as time goes by you lose focus on the costs, limits and purpose of the original project expenditure. 

 

I am more concerned, not by the amount that the benefactors have provided, but the increase in costs needing to covered from club resources.  The figure was £6.7m at the time of the last AGM.  £1m of AB's loan facility of £1.75m was also paid off during the year, so had to have come from club resources.  That loan facility has been extended for another year at the lower figure of £1m (£702k used so far).  That will also have to be paid from club resources, either this year or in future years.  Expenditure on paying off loans does reduce the funds that are available to be invested into the core business which is the first team. However, that impact has been lessened by specific donations into the playing squad of £1m in each of the last two years.

 

Overall I'm relatively content with the spending (although I would rather it was less), but until the redevelopment is complete and associated debts are paid off in full then investment in the footballing side will be compromised (save for further playing squad donations).

 

[Coburg Hearts]

9 hours ago, Geoff Kilpatrick said:

Absolutely, but it is irrelevant to ask who you would WANT as owner. if he turned round and said "Richard Branson" what would you have said?

Wilfred Pickles.

[Taffin]

I'd love to be a contractor for some people on here.

 

Me - "It'll be 8k for your new kitchen"

 

Invoice for 16k

 

Folk on here - "Ah well, that's just the way it works and I've got the money so it doesn't matter"

[Leveins Battalion]

Just think of all the cash we'll have after Budge is paid back early next year though 😍 

[Beast Boy]

2 minutes ago, Taffin said:

I'd love to be a contractor for some people on here.

 

Me - "It'll be 8k for your new kitchen"

 

Invoice for 16k

 

Folk on here - "Ah well, that's just the way it works and I've got the money so it doesn't matter"

Doesn’t really work as an analogy though. Maybe if the increase in cost was down to an improvement in amenities and finish, and a rich relative paid for much of the increased cost.. 

[Guest ToqueJambo]

Where's this worry about the stand reducing squad investment coming from? 

 

At the same time as building a new stand (and installing a new pitch), this summer we signed Scotland's best forward on a 4 year contract, plus a handful of other internationals or soon to be internationals. Over the last year or so we also signed up several of our best players, again including internationals, on longer contracts. Before them we signed players like Berra and Lafferty during stand construction.

 

What has been fantastic about Budge's management of the club is that, unlike Hibs when they invested in their infrastructure a while back and basically forgot about their team, we have continued to invest in the squad during very significant infrastructure projects. We've been let down by the last two managers but neither Cathro nor Levein can complain about then playing budget they got.

 

[Mr Brightside]

1 hour ago, Taffin said:

I'd love to be a contractor for some people on here.

 

Me - "It'll be 8k for your new kitchen"

 

Invoice for 16k

 

Folk on here - "Ah well, that's just the way it works and I've got the money so it doesn't matter"

That’s not what’s happened though. More like, ask your mate how much a new kitchen costs he says £8k, you then appoint joiner, electrician, plumber, tiler separately consecutively and the final total cost is £16k.  Also not helped that you changed your mind from mdf worktops to granite 3/4 of the way through.

[Dusk_Till_Dawn]

1 hour ago, Taffin said:

I'd love to be a contractor for some people on here.

 

Me - "It'll be 8k for your new kitchen"

 

Invoice for 16k

 

Folk on here - "Ah well, that's just the way it works and I've got the money so it doesn't matter"

Not to mention the project manager:

 

”We’ve been pissing about for three years and your kitchen’s still a fecking shambles.”

 

“No worries mate, you probably need another transfer window.”

[Jambo-Fox]

1 hour ago, Taffin said:

I'd love to be a contractor for some people on here.

 

Me - "It'll be 8k for your new kitchen"

 

Invoice for 16k

 

Folk on here - "Ah well, that's just the way it works and I've got the money so it doesn't matter"

........ “oh there’s one more thing, the units were not ordered so it will be 4 months late ....”

[Taffin]

1 hour ago, Icon of Symmetry said:

Doesn’t really work as an analogy though. Maybe if the increase in cost was down to an improvement in amenities and finish, and a rich relative paid for much of the increased cost.. 

 

I didn't state why the cost went up, just that it had. People on here who are just accepting it also don't know where the additional spend on the stand has gone so both are from a position of ignorance...unless you have a breakdown of the additional spend and what it was for? 

[Beast Boy]

Just now, Taffin said:

 

I didn't state why the cost went up, just that it had. People on here who are just accepting it also don't know where the additional spend on the stand has gone so both are from a position of ignorance...unless you have a breakdown of the additional spend and what it was for? 

I just don’t care, since the bulk of it has been covered by the benefactors and our turnover is up. Unless the club start accumulating debt, or we get told we need to “pony up” to pay for it, then I’m easy.

[Taffin]

20 minutes ago, Icon of Symmetry said:

I just don’t care, since the bulk of it has been covered by the benefactors and our turnover is up. Unless the club start accumulating debt, or we get told we need to “pony up” to pay for it, then I’m easy.

 

Which was the point I was making. 

[Beast Boy]

6 minutes ago, Taffin said:

 

Which was the point I was making. 

Yes, but you were making out as if doing so was remiss and a dangerous way for the supporters to act and feel. It’s simply not a huge concern, when it’s against a background of rude financial health. Unless you’re the benefactor of course? 😄

[Biffa Bacon]

2 hours ago, Taffin said:

I'd love to be a contractor for some people on here.

 

Me - "It'll be 8k for your new kitchen"

 

Invoice for 16k

 

Folk on here - "Ah well, that's just the way it works and I've got the money so it doesn't matter"

Assuming that the club have signed a contract with a supplier to deliver the stand, with no amendments or deviations, then you would have a point. Mrs Budge told us, early on, that changes had been advised and more expensive options were selected.A budget is an estimate or a target price, budgets are often amended during a project.

[Taffin]

10 minutes ago, Icon of Symmetry said:

Yes, but you were making out as if doing so was remiss and a dangerous way for the supporters to act and feel. It’s simply not a huge concern, when it’s against a background of rude financial health. Unless you’re the benefactor of course? 😄

 

I'm not sure I did make it out as either of those things. I said it would be great to be doing work for people like that as they don't question things and I'd make money. People can do what ever they like.

[Footballfirst]

6 minutes ago, Biffa Bacon said:

Assuming that the club have signed a contract with a supplier to deliver the stand, with no amendments or deviations, then you would have a point. Mrs Budge told us, early on, that changes had been advised and more expensive options were selected.A budget is an estimate or a target price, budgets are often amended during a project.

 

Transactions with JB Contracts.   Sorry sis, I'll have to ask for more.  No probs bro. 

2016	£248,000
2017	£1,465,000
2018	£3,300,000
2019	£1,100,000
Total	£6,113,000

[Mr Brightside]

15 minutes ago, Footballfirst said:

 

Transactions with JB Contracts.   Sorry sis, I'll have to ask for more.  No probs bro. 

2016	£248,000
2017	£1,465,000
2018	£3,300,000
2019	£1,100,000
Total	£6,113,000

Any idea what JB contracts profits look like for that period, contractors I have worked with are somewhere between 10-20%. Some people will take that £6m figure and claim it is pure profit.

[Thomaso]

4 hours ago, Mr Brightside said:

The issue with overspend / true cost has arisen for 2 reasons.

 

1) Poor cost estimates from architects/ project manager/ QS.

2) Not engaging with a main contractor in an attempt to save money.

 

 If the project was tendered to main contractors then the club would have had a firm price before  starting the works and this would have shown up a discrepancy in the cost estimate. At this stage the project could have scaled back/ scrapped or additional funding sought.

Thankfully additional funding was found and the project was not scaled back or scrapped.

[Beast Boy]

30 minutes ago, Taffin said:

 

I'm not sure I did make it out as either of those things. I said it would be great to be doing work for people like that as they don't question things and I'd make money. People can do what ever they like.

By total coincidence, I did actually have a kitchen/dining room extension built at the same time as our stand. Went a few grand over the price we were given, but nothing too excessive. In-laws gave us an interest free loan and now we have a nice big kitchen and dining room.

[Thomaso]

3 hours ago, Footballfirst said:

That's a fair assessment.

 

A question I would have is whether AB's previously stated desire to provide quality finishes to the lounges, toilets etc., has in fact increased the costs substantially from the original spec.  If that was the primary reason for the increased spend then you would hope that the expected return on investment would justify the cost. If it doesn't, then the redevelopment will  be rightly viewed as a vanity project or what AB sees as her legacy.

 

My personal view is that the increased spend was more down to poor estimating from the outset and that materials, construction and fitting out costs were always going to be higher than planned.  The investment in the upgraded pitch, rather than resurfacing is a new cost, but I can't see AB's improved spec being the biggest element in the increase.  We may hear from AB at the AGM that costs such as the new plant room, new boilers, replacing the undersoil heating system, CCTV upgrades etc. were not in the initial spec. 

 

There is always a requirement to incur capital expenditure to upgrade or replace plant, fittings or equipment, for which the club would have to pay year on year. It may that this routine expenditure is just being lumped into the Redevelopment Project, so as time goes by you lose focus on the costs, limits and purpose of the original project expenditure. 

 

I am more concerned, not by the amount that the benefactors have provided, but the increase in costs needing to covered from club resources.  The figure was £6.7m at the time of the last AGM.  £1m of AB's loan facility of £1.75m was also paid off during the year, so had to have come from club resources.  That loan facility has been extended for another year at the lower figure of £1m (£702k used so far).  That will also have to be paid from club resources, either this year or in future years.  Expenditure on paying off loans does reduce the funds that are available to be invested into the core business which is the first team. However, that impact has been lessened by specific donations into the playing squad of £1m in each of the last two years.

 

Overall I'm relatively content with the spending (although I would rather it was less), but until the redevelopment is complete and associated debts are paid off in full then investment in the footballing side will be compromised (save for further playing squad donations).

 

You are absolutely correct with your observations.

[Taffin]

15 minutes ago, Icon of Symmetry said:

By total coincidence, I did actually have a kitchen/dining room extension built at the same time as our stand. Went a few grand over the price we were given, but nothing too excessive. In-laws gave us an interest free loan and now we have a nice big kitchen and dining room.

 

👍👍 Nice investment. Id like mine done too but I can't stop scrutinising the spec and price so I'll probably never get it done 😂😂

[Beast Boy]

Just now, Taffin said:

 

👍👍 Nice investment. Id like mine done too but I can't stop scrutinising the spec and price so I'll probably never get it done 😂😂

When sport mimics real life! 😄

 

Definitely worth it. Although it meant staying with the in-laws for nine months whilst it was being built. 😬

[Biffa Bacon]

52 minutes ago, Footballfirst said:

 

Transactions with JB Contracts.   Sorry sis, I'll have to ask for more.  No probs bro. 

2016	£248,000
2017	£1,465,000
2018	£3,300,000
2019	£1,100,000
Total	£6,113,000

And do you know what the details of this contract(s) is/are? 

You are not suggesting that the club are over paying, because there are relatives involved in the transactions? 

Come on FF, based on your many previous posts, I would not expect you to be speculating in any way.

[Pistol1874]

58 minutes ago, Footballfirst said:

 

Transactions with JB Contracts.   Sorry sis, I'll have to ask for more.  No probs bro. 

2016	£248,000
2017	£1,465,000
2018	£3,300,000
2019	£1,100,000
Total	£6,113,000

Just to be clear, are you alleging that Mrs Budge has conspired with her brother to defraud Hearts and/or FoH?

[Footballfirst]

3 hours ago, Mr Brightside said:

Any idea what JB contracts profits look like for that period, contractors I have worked with are somewhere between 10-20%. Some people will take that £6m figure and claim it is pure profit.

 

2 hours ago, Biffa Bacon said:

And do you know what the details of this contract(s) is/are? 

You are not suggesting that the club are over paying, because there are relatives involved in the transactions? 

Come on FF, based on your many previous posts, I would not expect you to be speculating in any way.

 

2 hours ago, Pistol1874 said:

Just to be clear, are you alleging that Mrs Budge has conspired with her brother to defraud Hearts and/or FoH?

 

I'm not speculating in any way, hence the smiley.

 

However, the accounts do show that JB Contracts have been paid £6.1m for services related to the redevelopment project. That is worthy of note as a series of "related party" transactions amounting to 30% of the total spend.

 

I don't have the necessary experience to determine whether or not the Club got the best deal available. The Club has assured us that the tender and appointment process was all verified and approved by the Club Board, so we have to accept that.

 

If JB Contracts didn't previously have experience in managing multi milllion pound contracts then it is worth as least asking the question if the selection process was robust. Companies House documents do not provide sufficient information on the company to suggest whether or not this was a small, medium, or large contract for the company, as the company's turnover isn't high enough to require the submission of detailed accounts.   

Edited November 21, 2019 by Footballfirst

[Coburg Hearts]

11 minutes ago, Footballfirst said:

 

 

 

I'm not speculating in any way, hence the smiley.

 

However, the accounts do show that JB Contracts have been paid £6.1m for services related to the redevelopment project. That is worthy of note as a series of "related party" transactions amounting to 30% of the total spend.

 

I don't have the necessary experience to determine whether of not the Club got the best deal available. The Club has assured us that the tender and appointment process was all verified and approved by the Club Board, so we have to accept that.

 

If JB Contracts didn't previously have experience in managing multi milllion pound contracts then it is worth as least asking the question if the selection process was robust. Companies House documents do not provide sufficient information on the company to suggest whether or not this was a small, medium, or large contract for the company, as the company's turnover isn't high enough to require the submission of detailed accounts.   

All well and good, FF, but was there any need for the snide comment.............Sorry sis, I'll have to ask for more.  No probs bro.  .......... I didn't expect that from you.

[Mr Brightside]

9 hours ago, Cruickshank for Scotland said:

Thankfully additional funding was found and the project was not scaled back or scrapped.

Agreed. 

I do think going down a main contractor route would have been a better process even accounting for the additional overheads.

[Pistol1874]

6 hours ago, Footballfirst said:

 

 

 

I'm not speculating in any way, hence the smiley.

 

However, the accounts do show that JB Contracts have been paid £6.1m for services related to the redevelopment project. That is worthy of note as a series of "related party" transactions amounting to 30% of the total spend.

 

I don't have the necessary experience to determine whether or not the Club got the best deal available. The Club has assured us that the tender and appointment process was all verified and approved by the Club Board, so we have to accept that.

 

If JB Contracts didn't previously have experience in managing multi milllion pound contracts then it is worth as least asking the question if the selection process was robust. Companies House documents do not provide sufficient information on the company to suggest whether or not this was a small, medium, or large contract for the company, as the company's turnover isn't high enough to require the submission of detailed accounts.   

But you haven’t just ‘asked the question’, have you?

With no evidence either way, you have decided to go ahead and cast the aspersion, in a really rather snidey manner, to insinuate impropriety.

Really poor imo.

[Footballfirst]

7 hours ago, Coburg Hearts said:

All well and good, FF, but was there any need for the snide comment.............Sorry sis, I'll have to ask for more.  No probs bro.  .......... I didn't expect that from you.

 

36 minutes ago, Pistol1874 said:

But you haven’t just ‘asked the question’, have you?

With no evidence either way, you have decided to go ahead and cast the aspersion, in a really rather snidey manner, to insinuate impropriety.

Really poor imo.

I disagree. The Annual Report is a publicly available document. This thread is about the Annual Report. We are allowed to scrutinise its content.

 

There was a discussion about costing projects and various analogies about how much tradesmen or mates might estimate or charge. The "snidey comment", as you describe it, was posted in that context, and related to changing the spec and being charged more for the privilege.

 

It was only that discussion that prompted me to look at the related party transactions as I was aware of the family relationship involved in a contract for services related to the redevelopment. I was actually surprised to see how much had been involved so I checked the previous accounts. 

 

As I stated in my post, "The Club has assured us that the tender and appointment process was all verified and approved by the Club Board, so we have to accept that." 

[Biffa Bacon]

2 hours ago, Footballfirst said:

 

 

As I stated in my post, "The Club has assured us that the tender and appointment process was all verified and approved by the Club Board, so we have to accept that." 

in most Companies there will be a tender process that will have checks and balances to minimise risk on any transaction. I would expect nothing less of an AB overseen Company. I am not against questioning of decisions made, but other "less knowledgeable" may latch onto any suggestion that things were not performed correctly and set hares running. As a well respected poster your input carries a lot of weight to any argument posed.

[Francis Albert]

17 hours ago, Footballfirst said:

 

 

I am more concerned, not by the amount that the benefactors have provided, but the increase in costs needing to covered from club resources.  The figure was £6.7m at the time of the last AGM.  £1m of AB's loan facility of £1.75m was also paid off during the year, so had to have come from club resources.  That loan facility has been extended for another year at the lower figure of £1m (£702k used so far).  That will also have to be paid from club resources, either this year or in future years.  Expenditure on paying off loans does reduce the funds that are available to be invested into the core business which is the first team. However, that impact has been lessened by specific donations into the playing squad of £1m in each of the last two years.

 

 

If I am reading that correctly the often repeated claims that we have a new stand without  any debt and that benefactors only provided and would only provide money for the stadium redevelopment are wrong.

[Francis Albert]

14 hours ago, Mr Brightside said:

Any idea what JB contracts profits look like for that period, contractors I have worked with are somewhere between 10-20%. Some people will take that £6m figure and claim it is pure profit.

Just half a million to one million pounds profit then. 

[Footballfirst]

47 minutes ago, Francis Albert said:

If I am reading that correctly the often repeated claims that we have a new stand without  any debt and that benefactors only provided and would only provide money for the stadium redevelopment are wrong.

From the last three years accounts, benefactors provided the following donations:

2016/17 - £2.5m to the redevelopment

2017/18 - £2m to the redevelopment plus £1m to the playing budget

2018/19 - £2.25m to the redevelopment plus £1m to the playing budget

2019/20 - £500k unspecified use in the first quarter with a commitment to further funding.

 

During 2017/18 Bidco provided a loan facility in respect of the redevelopment of £1.75m for a two year arrangement, £1.702m of which was drawn down in that year. The loan facility attracts market rates of interest. An arrangement fee of £11k was also charged. If I've read the accounts correctly then I believe that  the amount of interest paid by the club in respect of that facility was £29k in 2017/18 and £47k in 2018/19.

 

During 2018/19 the club paid back £1m of that facility, leaving the balance at £702k.  The loan facility has been extended for a further year with a reduced limit of £1m.  The balance is scheduled for repayment within this current year, although probably could be extended or rolled over.

 

During 2017/18 the club also received short term funding of £170k in the form of interest free loans from Bidco. I believe these were used smooth out any cash flow shortfalls. Further similar funding was provided during 2018/19, with the balance at year end going up to £870k.

 

The club is not debt free at the moment and remains dependent on FOH funding to repay the principal loan to Bidco, benefactor contributions for the redevelopment and playing budget, and loans from Bidco both to fund the completion of the redevelopment and assist with any cash flow shortfalls.

 

The amounts of debt involved are at manageable levels and I would expect that the financial forecasts will see these repaid sooner rather than later. Personally I think that it will be two or three years before the club is truly debt free, with the redevelopment complete and able to operate at least on a break even basis without the need for external funding. 

Edited November 21, 2019 by Footballfirst

[Thomaso]

2 hours ago, Francis Albert said:

Just half a million to one million pounds profit then. 

Gross profit

 

ie. Less overheads

[Biffa Bacon]

3 minutes ago, Cruickshank for Scotland said:

Gross profit

 

ie. Less overheads

Based on an unfounded guess of 10 -20% profit, which might be correct, but might not. Speculation is meaningless.

[Francis Albert]

3 hours ago, Biffa Bacon said:

in most Companies there will be a tender process that will have checks and balances to minimise risk on any transaction. I would expect nothing less of an AB overseen Company. I am not against questioning of decisions made, but other "less knowledgeable" may latch onto any suggestion that things were not performed correctly and set hares running. As a well respected poster your input carries a lot of weight to any argument posed.

Isn't your "expect nothing less of an AB overseen company" meaningless speculation"? unless you know what tender process took place and what checks and balances were in place. The fact that the club board approved the appointment of Ann's brother's company would I suggest not be a rigorous confirmation of the rightness of the appointment when the board included Ann, her partner,  her buddy Levein and two FOH appointees who openly say they don't believe FoH should interfere in the running of the club 

[Biffa Bacon]

5 minutes ago, Francis Albert said:

Isn't your "expect nothing less of an AB overseen company" meaningless speculation"? unless you know what tender process took place and what checks and balances were in place. The fact that the club board approved the appointment of Ann's brother's company would I suggest not be a rigorous confirmation of the rightness of the appointment when the board included Ann, her partner,  her buddy Levein and two FOH appointees who openly say they don't believe FoH should interfere in the running of the club 

Fair point on ^meaningless speculation* FA, it could well be on my part, but I did say I expect, which suggests that it is my opinion. I don't agree that appointing her brother is necessarily an incorrect decision, we are not party to contract details. 

[davemclaren]

9 minutes ago, Francis Albert said:

Isn't your "expect nothing less of an AB overseen company" meaningless speculation"? unless you know what tender process took place and what checks and balances were in place. The fact that the club board approved the appointment of Ann's brother's company would I suggest not be a rigorous confirmation of the rightness of the appointment when the board included Ann, her partner,  her buddy Levein and two FOH appointees who openly say they don't believe FoH should interfere in the running of the club 

They all have legal obligations as company directors though. 

[Thomaso]

7 minutes ago, Biffa Bacon said:

Fair point on ^meaningless speculation* FA, it could well be on my part, but I did say I expect, which suggests that it is my opinion. I don't agree that appointing her brother is necessarily an incorrect decision, we are not party to contract details. 

The work carried out by AB brother did not go out to open competitive tender.

[davemclaren]

15 minutes ago, Cruickshank for Scotland said:

The work carried out by AB brother did not go out to open competitive tender.

So how did the board decide that company should get the work?

[Footballfirst]

23 minutes ago, Cruickshank for Scotland said:

The work carried out by AB brother did not go out to open competitive tender.

 

7 minutes ago, davemclaren said:

So how did the board decide that company should get the work?

From the accounts.

"The construction services were procured by our independent 3rd party Construction Manager, who was responsible for the evaluation, selection and appointment of suitable trade contractors, via a structured tender process. The Board are satisfied that the services were purchased on an arm’s length basis."

 

On the basis of the figures in the accounts, then JB Contracts must surely have had the largest trade contract in the project. 

[davemclaren]

Just now, Footballfirst said:

 

From the accounts.

"The construction services were procured by our independent 3rd party Construction Manager, who was responsible for the evaluation, selection and appointment of suitable trade contractors, via a structured tender process. The Board are satisfied that the services were purchased on an arm’s length basis."

 

On the basis of the figures in the accounts, then JB Contracts must surely have had the largest trade contract in the project. 

That is a competitive tender process then is it not? I agree it was very likely the biggest contract. 

[Footballfirst]

9 minutes ago, davemclaren said:

That is a competitive tender process then is it not? I agree it was very likely the biggest contract. 

 

A google search on a "structured tender process" came up with the following.

 

Quote

A structured tender process may initially involve issuing a contract notice, and inviting suppliers of the relevant good or services to submit an 'expression of interest'. A pre-qualification questionnaire can be used to restrict the tender process at this stage, or in an open tender process, the invitation to tender will be issued to those organisations expressing an interest within the timeframe allowed.

The invitation to tender (ITT) will consist of a number of documents and will include the scope of the project or service, contract specifications, contract notice periods, award criteria, deadlines and contact details. Your tender submission will respond to the ITT outlining how you plan to meet the requirements of the project, and the delivery what the buyer wants to achieve. For your tender to be successful, you need to show that your business can offer the best value, above your competitors.

A tender submission will usually contain:

- Information about your company
- The pricing schedule
- Your tender proposals
- Supporting information

The tender documents will ask you for the information needed to evaluate your business and determine the value for money you would be able to deliver should you be awarded the contract. The areas you are likely to be questioned on are:

- Your experience and capability
- Details about your proposals for the project
- Financial information and pricing
- Health and safety and environmental practices and performance
- Your staff and management, including the proposed project team and equal opportunities
- Your customer standards

Your submission will be evaluated by the buyer, buyer representative or a panel, who will score the tenders received. Points will be awarded for the responses you have provided and the quote value. How the points are awarded, and the points available in each section of the tender will usually be set out in the invitation to tender.
Your submission will be assessed on:

- Your company's technical and financial capability
- The quality of your proposals
- Your costs

Both financial and non financial information will be evaluated to determine which tender submission offers best value for money, and is ultimately successful in securing the contract. , Weighting for the marks can vary depending on the client priorities, for example tender evaluation could be weighed 50% quality 50% price, or 30% quality 70% price. Your tender submission is unlikely to be assessed on price, as the buyer needs to ensure that the successful organisation can deliver their requirements - always think best value rather than lowest cost.

 

Edited November 21, 2019 by Footballfirst

[davemclaren]

4 minutes ago, Footballfirst said:

 

A google search on a "structured tender process" came up with the following.

 

Just seems to be a very structured way to carry out a competitive tender to me. 

[Biffa Bacon]

46 minutes ago, Cruickshank for Scotland said:

The work carried out by AB brother did not go out to open competitive tender.

Thanks for the update, this does not change my view. Open competitive tender is not a prerequisite in selecting a subcontractor. There may be many reasons why this is the case e.g. limited time to put the purchase order in place. It does not mean that there is any underhand actions involved.

[Footballfirst]

1 minute ago, davemclaren said:

Just seems to be a very structured way to carry out a competitive tender to me. 

 

Agreed. It seems a sensible approach, with the proviso that the initial pre tender process didn't cut the number of ITTs to perhaps just a couple of competitive tenders. 

[davemclaren]

2 minutes ago, Footballfirst said:

 

Agreed. It seems a sensible approach, with the proviso that the initial pre tender process didn't cut the number of ITTs to perhaps just a couple of competitive tenders. 

Obviously it heavily relies on the independent third party’s integrity as well. 

[CJGJ]

18 minutes ago, Footballfirst said:

 

A google search on a "structured tender process" came up with the following.

 

so all your info is from Google...not a surprise

 

Real dedication and scrutiny shown

 

FF says 'lets google it' and we are meant to believe him

[Thomaso]

11 minutes ago, Footballfirst said:

 

Agreed. It seems a sensible approach, with the proviso that the initial pre tender process didn't cut the number of ITTs to perhaps just a couple of competitive tenders. 

Much of the work carried out by AB Brother was not competitively tendered.