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The fall of Carillion and the collaboration of the FM industry

Not a day is going by at the moment when repercussions of Carillion’s collapse aren’t reported in the news, along with interviews from naysayers who predicted the fall all along. It was inevitable, they say, following the instability of Brexit; it’s the government’s fault for choosing the lowest bidder; Carillion was badly managed and prioritised its upper management structure. However, while investigations are needed to prevent a similar crisis from reoccurring, it is also reassuring to look at how the industry is beginning to heal itself.

The expectation of a country ground to a halt has not materialised, due to a nation-wide collaboration to pick up the pieces of contracts, sub-contractors and suppliers. Initially, chaos reigned as the now former-Carillion employees were left in the dark regarding payments before PricewaterhouseCoopers (PwC) guaranteed wages, but many stoically continued to provide their contracted services to keep amenities going.

Smaller suppliers and service providers were also hard hit, particularly due to Carillion’s 120-day invoice payment terms, but several of the leading banks have stepped in to help business customers by providing interest-rate reductions, loan repayment holidays and fee-free overdraft facilities to prop up the supply chain to avoid crippling the economy.

Companies and service providers are playing their part by stepping up to bridge the unemployment gap, by either bringing contractors in-house or taking over the existing contracts. John Laing Infrastructure Fund Limited are taking on nine FM contracts, and organisations such as Nationwide and Oxford County Council are bringing the contractors in-house.  However, the abruptness of the situation has meant demanding continuity challenges in terms of reactive / planned maintenance and adherence to legal and compliance regulations in particular.

Technology is lending a helping hand here, helping to increase stability and information flow. Computer aided facilities management (CAFM) software has become an essential tool to manage   these aspects, in addition to delivering performance and operative efficiency. CAFM can ensure that that contracts and works are delivered on time and on budget through in-depth automated reporting, job scheduling and integrated help desk system. Software can be accessed on the go through any smart mobile device, and hosted by the vendor to avoid stretching in-house IT teams.

Systems like Service Works’ CAFM software, QFM, can be quickly mobilised through dedicated project teams, with preferential rates currently being offered to support businesses affected by Carillion. Service Works offering includes a special Quick Start deployment program for those looking for an immediate solution to assist during the transition and for the longer term if required.

The public sector is also working quickly to rectify matters; late last week saw the creation of the Ministry of Justice’s Gov Facility Services Limited to replace Carillion services at prisons. And to further aid smaller FM companies, the Crown Commercial Service (CCS) is expected to soon issue a notice for its new Facilities Management (FM) Marketplace. This process will create a more straightforward and transparent route to market for SMEs by simplifying contracts, creating framework and call-off contracts with the same terms and conditions to reduce legal expenses, and changing the way bidding is performed. This could mean that large, unstable providers monopolising contracts could be a thing of the past.

The situation for many is still one of uncertainty and discomfort, but the options emerging mean that companies have a choice to take this as opportunity and evaluate which is the best option for them going forward. There could be a light at the end of the tunnel yet.


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