State Rail +

Yesterday I posted about NSW State Rail and the issues they have had with failing to manage the bid process on station upgrade projects. It set my mind wondering what other holes may or may not exist in areas of contract management and liability within the government sphere.

One area which I have numerous close friends associated with is manpower security. It is pure speculation/rumour, however it is widely believed that government issues contracts for security services to tenderers who bid at 20-21$ per hour for static security services. The work is then apparently sub-contracted out to companies for even less - probably in the order of 16-$17 per hour. 

Given the current award rate for security officers is $15.82 it is very difficult to see how these subcontractors are surviving. Unless of course they also are subcontracting the work out to individuals who are operating as companies. 

The questions are: Is the government aware exactly who are providing these services on their projects - and what unknown security risks are running around within the security service providers? Given the tiny margins involved - are security providers fully insured - including those subcontractors they bring to the job? Given the degree of subcontracting, can any government department be certain the security staff they are being given are certified to the appropriate level to do the job?

How much risk do these issues present? If an unqualified, unlicenced security officer who is a sole trader paying no tax under a false ABN accidentally injures someone with a weapon they are not qualified to use, I suspect we will find out relatively quickly. Of course its all speculation......................

Cheers

Steve

NSW State Rail

Anyone living in NSW, Australia would probably be aware of the current catastrophe that is our rail "station upgrade". More than just an example of what can go wrong when the tender process does not have the right checks and balances in place, it also shows how important it is to have a full understanding of exactly 'who' is doing the work on projects.

It is alleged that at least two state rail project managers were able to become involved in the tendering process. Having prior knowledge of the budget allocation for each project, these two were able to submit their own bids which, not surprisingly, came in just under the budgeted limit. Naturally, their bids were subsequently accepted. The work was then subcontracted out for around 50-60% of the tendered amount - a profit margin in the order of 40-50%. Thirty projects and $1.7 million (in gross profit to the project managers) later and someone blew the whistle.

So where did the system break down? First, the actual budgeted amount for each project should have been a confidential figure. Knowing this figure was the critical plank in orchestrating the con, allowing the managers to almost guarantee winning each job. Somewhere there was an information leak that facilitated the whole thing to move forward.

Second, the project managers apparently set up "paper" companies to sign off on the deal. However, they apparently used false names as directors in order to hide their own involvment. A rudimentary check (such as a phone call) to the bidding companies would have revealed this instantly. Due diligence anyone?

Third, the bid process did not moniter winning bids in respect of 'patterns' - if bids continually come in at or on the budgeted amount this should automatically flagged. It is an instant notification that something is not right. Whether it is automated or actual eyeballs on the figures, someone needs to monitor this.

In the world of construction subcontracting is 'just part of doing business'. However the opportunities presented by bringing in a highly a specialised contractor skillset needs to be weighed against the pitfalls associated with the potential for an orchestrated con - something which is not a new concept to the industry.

However, the fact that such high profile organisations continue to be 'rorted' because of poor monitoring systems and lack of attention to detail shows just how constant vigilance needs to be. A key point to be made is that if a management system had been used that identified all stakeholders involved in each project, which also had performed the necessary due diligence checks, then this situation would have been entirely averted: you can never have too much of the right information about the contractors you use.

These systems do exist. Do we have the will to implement them? Can we afford not to?

Cheers
Steve Day

In the market

I'm pleased to announce that my company, Misedio, is now officially in the market. It has been a long and enjoyable road. We have spent the last eighteen months developing the software as a service platform technology. We have spent the last three months building our first application for the Misedio platform - and it is ready for use.

The first application is called 'Conform'. It is a tool that construction companies use to manage compliance of subcontractors - staff, plant, and company. Crictically, Conform uses all the collaborative benefits of Misedio: contractors update their own information which is then made available to those up the line - such as businesses the contractor is subbing to.

Conform provides principal contractors with an easy method to monitor the compliance status of the contractors they use. In addition, we are working very hard to:
- Add access control technology that will work seamlessly with Conform data so that only authorised contractors will be able to enter projects
- Integrate auditing functions to the Conform data - which will allow 'checking' of compliance data to be outsourced to industry specialists and subject matter experts.

The response has been very positive and we expect to have major pilot projects started soon.

Regards
Steve

Cameras for your construction site?

Heres a good solution that has been put in place to a hard issue. For smaller projects, and for project home builders, getting a handle on the security issue can be difficult. Materials such a copper piping and tools and installed goods such as whitegoods can go missing as quickly as they are deposited to site.

SecureIt in the UK have installed camera's on a project home site. Cameras are motion sensitive and infrared enabled and alert off site monitoring when activated. Monitoring staff can then look at vision from the site and make a decision about whether to alert a roving patrol responder to attend.

This system has been so successful they are now going to install on five other sites. Obviously this is a highly cost effective way to secure a project. It also has the potential to introduce economies of scale. For example, where a construciton company is currently using individual security officers at a number of construction sites in close proximity, these could be replaced with one roving officer who responds to threats as identified by the cameras.

There is real potential for cost and efficiency savings within this setup. There is also the opportunity for construction companies who currently are unable to use security because of the cost to add this solution to their opperations.

Regards
Steve
www.misedio.com

Links
Article: SourceSecurity.com
http://www.sourcesecurity.com/news/articles/co-3572-ga-co-227-ga.1900.html

Biometric Security

There is a lot of vendor advertising material floating around boasting the benefits of biometric security systems. A number of construction companies I know are considering access control systems for their construction sites. Some have been advised this is the way to go if you want high security outcomes. The main benefit extolled is that you can rely on biometrics to "man" an unmanned gate - ie by installing a turnstile.

I would advise caution before going down the path of a biometric security system rollout. The important thing to focus on is the business outcome that you are trying to achieve. If you are building a military installation where access control is a premium requirement, by all means, biometrics could be the answer to a difficult security question. However, if all you want to achieve is head count with an added degree of access control, then simple bar code technology could suffice. The difference here in cost could be in the order of 10k to 160k - so consider carefully what you want to achieve before moving forward.

On the issue of securing a gate with a turnstile and biometrics combination I would advise watching the linked Mythbusters video below. This video is not meant to detract from the value of biometrics, rather, it should serve as a clear warning to choose equipment from a reputable supplier with a proven track record.

I have linked anther video which describes the different types of biometric technolgy that is on the market. I will blog specifically on each over the following weeks.

Steve
www.misedio.com

Links
Mythbusters crack fingerprint reader...with wet paper photocopy!!!
http://www.youtube.com/watch?v=LA4Xx5Noxyo&feature=related

Silcon.com outlines biometric technology
http://software.silicon.com/security/0,39024655,39169487,00.htm

Liability for Security Contractors

Ive taken this one from my Misedio website - courtesy WorkCover NSW.

Its a good reminder why principal contractors engaging security (or any sub-contrator actually) MUST ensure their subbies have adequate insurance coverage. If your sub-contractor has ineffecitive cover (ie no coverage at all) the principal contactor will be up for the bill (or their insurer will, if its covered in their policy).

$407000 fine for subcontrator employee fatality
In the NSW Industrial Relations Commission in 2005 a head security contractor, a company it had engaged as a sub contractor, and a director were issued fines totalling $407,000. The Workcover CEO said, “This judgement is a landmark decision, which has clarified that the place of work definition in the Occupational Health and Safety Act 2000 applies equally to principal contractors and sub-contractors.”

Of note, principal contractors often rely on invoicing as a way of controlling their contactors ongoing insured status. They demand that sub-contractors must submit a copy of their current insurance policy prior to issuing payment of an invoice (as principals know,under the security of payments legislation, this is in fact law). However, this system does not adequately cover the situation of insurance expiring immediately AFTER an invoice has been paid. You could potentially have an uninsurred contractor working for you, and not have this identified until the next invoice is recieved for payment.

Don't say I didn't warn you......

Steve
www.misedio.com

Links
Misedio website where article can be found:
http://www.misedio.com/Resources/CaseWatch/tabid/305/Default.aspx

Workcover website where article can be found:
http://www.workcover.nsw.gov.au/MediaResources/MediaReleases/2005/security_firms_fined_after_fatal_robbery.htm

Easy and Effective Risk Analysis

I've written before on this blog about site security guarding services and their critical function on construction sites. Well, ive just come across this excellent and simple risk assessment checklist by Ashmark security of Melbourne (Australia). This list contained on this page asks the simple questions that should get any site or project manager thinking the right way about construction site security. The fact that Ashmark are asking their construction clients whether their gate hinge pins are spot welded tells me that this is a company that KNOWS the environment into which they are selling services.

If their webswite is anything to go by, if you are looking for a security provider in Melbourne, I would think they are well worth checking out.

Steve
http://www.misedio.com/

Links
Ashmark Website:
http://www.ashmarksecurity.com.au/scripts/default.asp?idPage=5&Name=Home

Ashmark page on which risk assessment information is found:
http://www.ashmarksecurity.com.au/Scripts/default.asp?idPage=4