I suppose it depends on what you class as value for money?
If we just allow Sqn’s to sort it out, who will be the person to chase around looking for quotes? Who will let them into the sqn, and stick around to make sure they don’t have a poke around in the armoury? My unit is on an AR centre, with some interesting lodger units - who will babysit the contractors whilst on site to make sure they don’t do anything they shouldn’t? Who will sign off to say that any work has been tested and is safe? Who will be the one chasing up snags, should there be an issue? Who will make sure that I’m not giving my mate the work, and asking him to inflate the bill, so we can both get a bit of free money? Or just do the work myself, and bill RFCA for my time?
I’m as frustrated as the next person with the speed and quality of some jobs, but at least all of the above points are taken care of.
The problem though is that all those costs for time spent by RFCA employees ‘arranging’ the jobs are in addition to the extortionate bills presented by some of the chosen contractors.
Certainly I’m happy not to have to faff about setting it all up (though for the longest time we still had to send a volunteer to open the building and hang around for a day), but it doesn’t justify the massive misuse of public money through the RFCA contracts.
Undoubtedly somebody is getting an incentive to hire some of these cowboys.
Like I said, I’ts not as big a rip off as you make out.
Yes, I could nip to B&Q and buy a tube for £5, and that would be the total cost to the organisation. But then I don’t have to pay for insurance, transport costs, admin costs, wages, security clearances, labour costs, tools, holiday pay, and still make a bit of money for the shareholders…
This is the excuse for all of the crap government contractors out there, we are so afraid of corruption that we are willing to be ripped off wholesale instead.
I reckon that even if my mates did do it with a brown envelope for me it would still be better value for money than the cowboys we get now!!!
I’ll bet he drives around in a different Bentley every day, swims in a champagne filled swimming pool every night, and snacks on caviar, due to all of the excess money RFCA throw his way…
The moral of the story is that it pays to have a cushy relationship with your local RFCA.
If I tried to dump £500 onto every customer’s small job under the guise of “insurance, transport costs, admin, labour, tools, holiday pay, &c” I’d be out of business in less than 10 minutes. Nobody would touch me because I’d be more than 500% more expensive than any of the competition.
I remember a story told to me from Nimrod crew member about JPA being introduced. Apparently they used to get a cash allowance for food, drink, etc. when they landed away - £25 IIRC. There was some worry that they would buy a bag of chips and pocket the rest. When JPA was introduced, the limit was upped to £80, but you had to submit receipts.
The net result was they would rinse the food allowance, and end up claiming back much more for each day than the the £25 cash allowance. Apparently some unscrupulous crew members would even ask their host for beer or wine, but bill it as a steak or two. And to sweeten the deal, their host could put another “Steak” on the bill, and pocket the cash.
Of course it does. It doesn’t mean that every job is as massive a rip off as some would like you to believe, though.
But that’s not what has happened here. The job requires a firm who are vetted and approved to work on MOD projects. That fact alone will attract a premium. There may no local firms who bid, which means anyone travelling any distance will factor that into their bid as well.
Personally, I’d rather the contracts were tightened up to include guaranteed remediation of any snags, and better QA, than try and cut costs.
I totally agree that there are certain additional costs; but I’ve got to disagree with your valuation of them.
All the costs you describe are operating costs for the company. They cannot legitimately be passed on to the customer.
Even if one considers operating costs being shared across every job that company undertakes in the year there is absolutely no way in hell that £550 for a job to swap two fluorescent tubes is justified.
“Sure, I’ll come and install a couple of double sockets for you… But you’ll have to pay for my insurance, certification, company car, I want two weeks of holiday pay, my test gear is due for calibration…”
It wouldn’t fly in the private sector… It wouldn’t fly with the tax man either.
But it works in other industries as well
Your Car Dealer maintenance charges over £100 per hour labour - jobs are charged by 1/2 hour regardless of how long they take
My builder charged my fixed price per sockets etc
And it is a basic rule of business Profit=Revenue-Cost
They won’t appear on your bill, but a proportion of what you pay will go towards covering them.
A self employed electrician may charge £100 PH + parts, but how does he pay for his tools?
Does he:
a) Take the costs of his tools for a year out of his gross takings, being sure to make sure his labour rate covers his other work costs, as well as pay them a reasonable wage, ands then claim the VAT back for them.
Or
b) Some other way that doesn’t involve spending a penny from his gross takings?
Costs like that are always factored into the bill, even if they don’t appear as an itemised amount.
Yes but not £550 to change 2 light bulbs, it would be a percentage of the value of each job not add £300 onto tat one as I need some work done on the van.
I bet those contractors wouldn’t charge the same to a proper customer.
They look at the going rate of their competitors to ensure that they’re not pricing themself out of the market and then they charge a fair rate for each job.
The customer has to pay a fair price and the company pays the costs.
They know that their income for the year is going to be influenced by how many jobs they can take on, multiplied by that fair price.
They shop around to ensure that they don’t spend more than they can afford to on supplies, tools, &c.
The costs of tools, professional registration, &c are paid and if at the end of the year those costs have exceeded the income, they file a loss for the year.
This is normal. Many new business file a loss for the first few years. Consider also that they will offset those costs, and any losses, against their tax.
It’s important also to consider that tools, a van, &c are not ‘costs’ in the same sense as say, buying lunch or paying for insurance… They are purchase of assets. At the time of purchase your business equity hasn’t changed. You’ve spent £500 cash, but you’ve gained £500 worth of asset.
Those tools might be expected to last for 10 years so you can’t decide “Its an expensive month… I’d better stick £500 on these next two jobs”.
Say I make a £500 loss this year because my costs were higher than expected, or because I didn’t get as many clients as I hoped… That’s £500 less tax liability next year.
No self-employed electrician (or any sensible private business for that matter) can pass all their costs onto their customers if that means that their bill is going to be 5-10 times higher than it should be. They won’t stay in business.
Only in these little havens where crooks get public contracts does that behaviour fly.
let’s say that the contractor did have to travel, and it ended up being a half day job. That’d mean the contractor charges £1100 per day. Assuming they take 6 weeks holiday, + 2 weeks for Bank Holidays + other closures:
550 * 2 * 5 * 44 = £242000
I have no idea about electrical contracting. Is this a reasonable estimate for running a business? (I’ve ignored the parts cost, because they’re such a negligible amount of the total cost of the job)
Fact of the matter is if you quoted for the task and they came back with that as a cost you would laugh at them. Not pay it and then invite them back again.
As far as I’m aware, for RFCA jobs it’s a fixed cost per job. The contracts are put to tender, the company bids, is awarded, and the work is carried out. The profit on the quick and easy jobs like changing 2 light tubes helps offset the cost of when you get there, and the two fittings + wiring need to be replaced as well.
Look, I get that. But they will cover their costs at some point from the money they charge the customer, won’t they? And those costs will be factored into the bill that the customer had to pay. The whole point of going into business to to make a profit, and to do that, income needs to exceed outgoings.
Companies contracted to RFCA have additional hoops to jump through before they can bid for jobs, and once that is achieved, they can then add a premium to their bid.
Of course you wouldn’t put in a quote. But if these outgoings don’t need to be covered by the customer, where exactly is the money coming from? And if making a profit is so distasteful, Why are all tradespeople not £Min Wage + Parts?
My mate is a corporate lawyer. His firm charge over £500 per hour for his time. And yet, he doesn’t get paid anything like £500 per hour. Where do you think that “missing” money goes?
