Just a theory, but is G4S actually running the security contract? In major contracts it is a usual practice to set up a "shelf" company with no assets to run the contract. The main contract is then assigned to that shelf company. The cash flow funding for the contract is loaned as an inter company debt from the parent company. In that way the parent company avoids any potential liability and leaves the actual operating company with a massive secured debt which ranks in priority to any other debts e.g contract damages.
So let's assume that G4S has done that. Now we have the Police from 9 Forces involved and they are already demanding payment for their resources. Thus, as at today, no one has promised to reimburse the Police for their action, standby, and resources. If the actual contractor does not then presumably it will either be the Government or the Local Taxpayers of the Police force being used. Here in East Yorkshire that has to be a no no as our force is under funded anyway!
Then with cuts in the number of Police, with personnel being moved to other parts of the Country what happens if we need Bobbies around here? Potential action for a failure to meet their statutory duty?
Then you can consider the liability issue. Who is now actually responsible for security at the Games is it G4S, the Army or the Police? If anything untowards happens and that results in claims for compensation who pays? Anyone suffering a loss has to work that little maze out!
If the contract has been assigned by G4S to a shelf company, has the Games management Committee secured personal guarantees from the parent company to underwrite any potential claims? When the Police step in to manage events is there any indemnity in place from G4S for any of their liabilities. As they are stepping in at a moments notice I imagine that there is no time to negotiate such an indemnity. So who do you sue if the wheel drops off? Sue G4S and they will probably try to pass the liability off to the Army/Police. That would be normal litigation practice.
The opportunity here for the public purse to pick up any losses is potentially quite large. Then if G4S shelf company, if there is one, has a potential liability it can be liquidated so that it can't be sued (in reality). Even if you sue a Company in administration/liquidation it becomes more of a lottery action. That is to say, you win your case but you have to wait for the shelf company to win the lottery before it has any money to pay out the damages.
Look at Jarvis. It won the contract to maintain the railway lines. It passed the contract to a company it set up to operate the contract and called it Railtrack. That became responsible for any number of breaches of contract and after the Paddington crash it was wound up and its liabilities/benefits etc all passed to a Public body - Network Rail - to manage the rail tracks. That company was then prosecuted by the HSE for breaches of safety (leading to deaths) that occurred long before that company was created!!!! The Public purse had to pay the enormous fine. That is the reality of the theory I have talked about thus far.
Just hope that when the House of Commons select Committee today investigate this mess they probe these particular issues so that Joe Public knows just where it stands.
So, potentially, this mess is not just about G4S not getting its act together, it's about potential consequences if the wheel drops off.
Private train companies are required to renew the rolling stock as part of their contract. They aren't doing, so part of the £9bn announced yesterday by the Coalition is not just for electrifying the tracks (managed by a public body Network Rail) but is also for new rolling stock. Tax payer picks up the tab again for a breach of contract. A recent think tank report into British rail system recommended nationalisation of the the lot if it is ever to brought into the 21st century. This will be another example of what Jeremy Hunt calls the 25% failure rate in major contracts being expected as the norm. It is what I would call setting up the contract so that if that 25% failure rate manifests itself then the contractor should pay.
Phil
Post last edited on 17/07/2012 12:19:16
------------- If you're not on a fell your wasting your feet and for 2014 it's.......Feb Castleton Mar North Yors Moors; Apr Sutton on Sea; May Thirsk; Jun Clapham/Riverside (Lakes); July Wharfedale; August Crakehall; Sept Knaresborough; Oct Wirral Park/Clitheroe
Interesting Phil. As no one is actually giving any cast iron guarantee of who will pick up the tab for paying the police and armed forces, I'm beginning to think you are probably on to something there.
Apparently the G4S boss told MPs today that he is definitely still the man for the job. He obviously intends to hang on in there, by his fingernails if necessary.
When the games are over and the media conveniently forgets about this mess, quietly and behind closed doors arrangements will be made for the poor old taxpayer to pay. Meanwhile the people at the top will keep their well paid jobs and be awarded a bonus!! Beyond belief.
Well they did say they would foot the bill for all this. That retired police bloke is still trying to hand that pass back and they replied with all sorts of emails about security jobs but nothing to do with the pass he has, over the weekend he kept phoning them and got nowhere. I heard on radio 2 something about American troops helping us out to.
this is where the squaddies are staying compared to the g4s staff in hotels the higher your rank the higher the hotel bill,
Amazing to the boys and girls of the uk forces will do a tenfold job
------------- if there is magic on this planet, it is contained in water
It should be our troops in hotels and not those G4s guys, something is wrong with this country and it makes me so ashamed to be British sometimes, i sometimes wonder are we the laughing stock of the world, something is wrong somewhere thats for sure. Most likely some of these lads have just come back from active service, time with there familys would have been better rather than them filling in and sorting out the mess up that G4 has made of this and for them having to sleep in some steel shack, what an insult to our boys as they deserve better but they are just doing what they have been told to do and they feel a sense of duty which the same can not be said for G4 who have made a mess of things. Will they be kind enough to pay our troops, police ect, I wonder or will it be forgotten in time.
They have known about this event for a few years and have not prepared for it and the end result is this, one does wonder how other nations who have had this event how did they go about things, they may have had a few small issues but nothing like this.
Funnily enough, not only are a lot of people who have applied and been trained not being told where to turn up, but it also appears that people employed by G4S already as event stewards (at arenas and stadiums) are NOT being used because (if what I was told by one is correct) G4S will not provide them with additional training as it MIGHT mean they want higher wages when going back to doing normal stewarding jobs.
I do stewarding and you get paid for the JOB you are doing NOT for the qualifications you have.
------------- It'll work out in the end!!!!
I didn't do it !! Nobody saw me do it !! You can't prove anything !!
When G4S said that they will lose £50m as a result of the Troops and Police being called in everyone took that as meaning that G4S will pay compensation. I took a different view. The contract is valued at around £284m. According to news reports it has been structured so that G4S get paid for what they deliver. If they deliver, say, £50m short of what is required then they get paid £234m and so lose £50m of what they hoped to get out of the contract. That £50m, which has been set aside already to cover the G4S security contract could be used to pay the Soldiers/Police etc. In other words the Tax Payer pays out of the original contract sum. LOCOG does not lose out financially. G4S doesn't lose out as it gets paid for what it actually delivers.
Just a different slant on things perhaps. No one has yet said what happens to the money left over from the G4S contract as a result of them not delivering 100% of the contract. The MPs on the Select Committee never went along that line of questioning. Maybe they will when LOCOG appears before them. From what I saw on the tele the MPs appeared to be more concerned with showboating - publicly humiliating the CEO, rather than getting into the nitty gritty of the contract and why it went wrong.
The contract is also, apparently, split as regards payments. Payment of a contract admin fee they get no matter what and then payment for what they actually deliver. So the contract management fee goes to the company and the fee for the security staff pays their wages. The CEO made it clear that G4S are to keep the management fee of some £50odd million despite their breach of contract. Just what did they do for £50 odd million and does that represent value for money which all public awarded contracts are required to do. Maybe the Select Committee will investigate that issue?Doubt it, these investigations tend to be undertaken some time after the event by the National Audit Office. It then issues a report and if we go to the usual timetable, when that is issued, there will have been a General Election, LOGOC will have been disbanded and G4S, or any shelf company it set up for this contract (if there is one), will all have changed or moved on or retired and if there is any ginger pointing there will be no one left to blame.
Happy days...let's hope it all goes swimmingly otherwise there will be hell to pay if anyone can be found to pay.....oh that's us isn't it?
Phil
------------- If you're not on a fell your wasting your feet and for 2014 it's.......Feb Castleton Mar North Yors Moors; Apr Sutton on Sea; May Thirsk; Jun Clapham/Riverside (Lakes); July Wharfedale; August Crakehall; Sept Knaresborough; Oct Wirral Park/Clitheroe
Who negotiated this contract with G4S is what we really want to know now and the finer details of the contract. Media looking for headlines won't approach it from that angle and it will all be swept under the carpet, me thinks.
The other thing to consider is the many other contracts with private companies that have been entered into for Olympic services, presumably along the same lines,with no penalty for failing to provide the agreed service.
A day of all things motorhome and campervan. The show is held both in the main indoor arena and across the grounds. Catering, hot drinks and food options are available. Easy access to the site and free parking included. Win one of five pairs of day tickets
Topic: G4S Olympic security. What a joke.
