De La Rue Backs Down On Passport Procurement Challenge

De La Rue announced yesterday that they will not after all challenge the decision to award the new passport production contract to Gemalto.  The BBC reported that a De La Rue spokesman said:

"As we initially announced, we have looked at all possible avenues open to us, and thoroughly evaluated all our options. Following four weeks of intense consideration and clear legal advice, we have taken the decision not to challenge the award of the UK passport contract”.

De La Rue no doubt got some top lawyers to look at the whole process, but now they say this:

"We have been advised that the grounds for overturning the decision are insufficiently strong to justify continuing this course of action. We remain both surprised and disappointed by the decision of Her Majesty's Passport Office to award the contract to a competitor. We believe De La Rue submitted the highest quality and technically most secure bid.”

Yes, but risk and quality are only two of the three key aspects of a supplier and bid evaluation like this. Cost is the other and that is obviously where the firm fell down against their rivals.

As we said here, unless there was an obvious flaw in the procurement process, then De La Rue could only hope to argue that the competitive bid from Gemalto was unrealistically low – and that is very difficult to prove. To do so might also have involved De La Rue exposing a lot about their own cost structures, which might not have made for a comfortable experience.

We also offer congratulations to the Home Office / Passport Service procurement team involved here. The lawyers will have had a good look at the procurement process and would have seized on any weaknesses. It is not a pleasant experience to have a procurement challenged, particularly one of this sensitivity, so there will be a lot of relief amongst the buyers.

However, there is still some tension to come. Basically, Gemalto must deliver. Remember the fuss about the Met Office losing the BBC weather contract? There were some concerns about the implementation process for the new supplier there at one point, and indeed go-live was delayed, but now the hand-over seems to have gone pretty smoothly. But imagine how matters would have been reported had MeteoGroup failed. Similarly, Gemalto really must succeed, or this will all blow up again in an even more virulent way.

In the meantime, no doubt some (the Daily Mail) will make a fuss about this but we would suggest if they feel so strongly about it, the owners of the Mail might like to stump up the £120 million of taxpayer savings that they seemed to be willing to forego to give De La Rue the deal.

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