Brexit Ferry Contract – Evaluation and Decision Process Fit for Purpose?

You most likely heard the news over the past couple of days about the (almost) £14 million Brexit ferry contract awarded to a company (Seaborne Freight) with no ferries and no experience in running ferries, as part of no-deal Brexit preparations.

We did some digging and found some (unverified, but reported) facts:

  • A French director of the firm has owned two previous companies that went bust.
  • Another director is a governor at Transport Secretary Chris Grayling’s old school and is the director of another shipping company that is £93m in debt.
  • The company was set up only two years ago, therefore hardly any trading or credit history to evaluate, though it had £600k injection in Sept 2018; did an investor have prior knowledge of the deal we wonder?

I’ve had first-hand experience of a public sector contract that was awarded to a company I once worked for, which, when we looked into the contract, was significantly loss-making for us; we had no prior history of services in the contracted area and it ultimately became unsustainable. It turned out our pricing was also miles under the nearest bid which surely should have raised questions and alerted those responsible to do further due diligence. I ended up having very positive discussions with our client in the public sector who were very supportive, and we raised our pricing to a sustainable, viable level.

That said, it engulfed me with a sense of frustration and annoyance that such a contract had been awarded in the first place, seemingly without appropriate checks on how public money was being spent. Awarding the contract to the company I worked for was not a good decision for our small business nor the public purse. So I feel endorsed to a degree, that this contract award has been picked up by the press and I assume it will be scrutinised much more rigorously as a result, perhaps with a reversal of the decision to follow (although unlikely).

Recall also the reversal of the decision to award the west coast train service to FirstGroup in 2012, and remain with Virgin; that whole fiasco cost the tax payer enormous amounts of money, not only in terms of the people brought on consulting rates to run the tender process, but in compensating the bidders for the botched process which would have cost those suppliers huge amounts in opportunity costs.

So it does raise some issues: it would appear that in certain circumstances, the evaluation and decision process isn’t fit for purpose. Freedom of Information should allow for the evaluation criteria to be openly scrutinised. I’m certain many will be clambering to view the details of the evaluation and award process, not least the unsuccessful bidders and I should hope, the Minister for Transport himself. He has just defended the decision saying that the government is supporting new British businesses – nothing wrong with that of course – and that they have put in place a “tight contract that makes sure they can deliver for us.” How that works we don’t know – but we will watch with interest.

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Voices (7)

  1. Patrick Tuite:

    The contract was awarded without prior publication on the grounds that there was insufficient time to run a procurement exercise. Surely if that were the case you would want to award the contract to a tried and tested company with track record of delivering a comparable service, which this company clearly does not have.

    The weighting of the award criteria seems pretty disingenuous as well considering the contract doesn’t appear to have been tendered, does make you wonder if it weren’t tendered how the supplier came to the attention of the DoT.

    I’m all for the award of contracts to newly established companies who can demonstrate they can deliver the service but is a £14m international shipping contract with three months mobilisation really the time or place for that?

    1. Arajag:

      So what would you do? There’s a lot of criticism of this, based mostly on speculation and assumptions, but not much being said about what they might have done to meet this requirement?

      1. Jenny Draper:

        Fair question, though I figure they could have gone through a longer and more overt expression of interest phase to attract wider interest than just the one company.

      2. Patrick Tuite:

        You’re right, it’s all too easy to criticise and speculate and I haven’t got a simple answer to this situation but the process and justification of the award has to be challenged just like any other public procurement.

        The award notice states it is as a result of “Extreme urgency brought about by events unforeseeable for the contracting authority”, seeing as the UK voted to leave the EU over two years ago it makes it difficult to just accept this, appreciate it was never going to be a priority item but there was clearly sufficient time to tender this service. The magic of hindsight, all fairly irrelevant now I suppose…

  2. Chris Smith:

    Seaborne contract TED notice award criteria is very confusing/contradictory: “Quality criterion – Name: 20 % Quality, 80 % Price / Weighting: 20 % Price – Weighting: 80 %”

    UK Public Contracts Regulations 2015: “Where a state of urgency [exists]… it may fix a time limit which shall be not less than 15 days from the date on which the contract notice is sent” i.e. open procedure was easily doable and DfT ‘failed’ to plan ahead

    Shouldn’t the Cabinet Office Public Procurement Review Service take a close look at how this procurement was handled?.

    1. Jenny Draper:

      I agree Chris.
      Who is going to give us a clear explanation of how this contract was awarded? It seems that Seaborne were the only bidders for this contract…again, something very ‘fishy’ about the whole thing.

  3. bitter and twisted:

    I think we’d all like to see the enchanted contract which will magically compel a company with no assets to deliver. It will revolutionize procurement.

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