Earlier this year ((2012) 23.2 CL p 1, Editor’s Comment) we reported on yet another promised procurement shake up in central government. Fewer than half of major government projects were being delivered on time and to budget and a new initiative was announced to train 145 senior civil servants to take over project management roles currently being undertaken by consultants.
Since then there has been a growing tide of evidence about central government’s procurement capabilities, little of it encouraging. Recent events suggest that the problem is even bigger than was thought and will require something more than one year courses for a few score civil servants. The headline grabbing fiasco of awarding the West Coast franchise to FirstGroup and then giving it back to the incumbent Virgin Trains, albeit temporarily, is only the best publicised example of the problem.
There were ‘significant technical flaws’ in the way the process was managed and retendering could delay the final award by 18 months, Transport Secretary Patrick McLoughlin admits. This is likely to run and run and even the legality under European law of the stop gap solution of handing it back to Virgin for a while is unclear. A review of the franchising process is under way and is expected by the end of the year.
Local authorities are not immune from the procurement malaise. As frameworks have grown in size and complexity so have the underlying demands of managing the procurement process, and many have been found wanting. The North East Procurement Organisation has recently had to scrap a process under which over 40 construction companies have spent over a year preparing bids for a framework valued at £360 million. About double that number went through pre-qualifi cation.
Legal advice was that to continue would invite possible challenges from failed bidders due to a flawed process. The councils found it too difficult to evaluate the competing bids so new bid documents are being drafted and everybody has to go back to prequalification again.
Amey has reportedly challenged the procurement process used by Transport Scotland in awarding a roads maintenance contract after its bid was rejected for being too low. There have been cases of contractors failing to understand the demands of a project and underbidding, and authorities are quite right to try and spot these bids and reject them. Amey however is not only one of the country’s most experienced roads contractors but is the incumbent supplier of trunk road maintenance in that region.
There seems to be a major discrepancy between what the contracting authority thought it was asking for in its documentation and what Amey thought was being asked for. It is surely for the procuring body to ensure that the process is unambiguous and transparent. An injection of professional procurement expertise is obviously needed urgently throughout the public sector. The training initiative so far announced – involving just 145 civil servants – is nowhere near adequate to the task.
Nick Barrett
Editor