Garden Bridge Audit Report – An Illegal Procurement Process, Basically

The audit report into the two procurement processes around the London Garden Bridge design and development services has been presented as in some way clearing Transport for London (TfL). The audit says it “ did not find any evidence that would suggest that the final recommendations did not provide value for money from the winning bidders”.

But there is evidence of a shambolic and unprofessional process. Any procurement person reading the report can only assume that the aim was to appoint Heatherwick and Arup to the key roles, because those were the firms that the sainted Joanna Lumley and Boris Johnson, London Mayor, had set up to win the work before someone realised there needed to be a competition.

Indeed, according to impressive detective work from Will Hurst of Architects Journal, it now looks like that comment about value for money was added at a late stage, to sweeten the positioning of the report. To be fair to the auditors, the report (if you read it properly), is not the whitewash we might have expected. Indeed, it exposes some truly dreadful procurement processes.

One can only assume that either TfL procurement’s function is wholly incompetent, which I do not believe for a moment, or that they were pressured by senior people into coming up with the “right” results. Here are some of the horrors.

1. Key material relating to the evaluation process has been lost or destroyed. That is presumably why there is no discussion in the report about how Heatherwick, who had never designed a bridge before, could have scored top marks in that competition. The design bids were also evaluated by just one person – again, really poor practice. “The technical evaluation of the three bids was undertaken by a single person in TfL Planning and endorsed by the MD Planning”.

2. In terms of the design contest, the report says “The rates submitted by the three bidders varied significantly. As a result, a decision was taken to give all bidders the same evaluation score, and the contract was awarded as a fixed fee and capped at £60,000”. I don’t quite understand what that means! But you can’t just decide to change the whole basis of the evaluation and award once you are into the process – and again, we can only assume that was done because the evaluation was not arriving at the “right” answer.

3. Perhaps most shockingly, the whole evaluation of the second tender was subverted, presumably in order to arrive at the decision to award the contract to Arup. After the initial evaluation, Arup scored 7th because of their high pricing, although their technical bid was judged to be the best. So TfL went back to Arup and suggested they re-submitted that pricing, and after a re-evaluation, hey presto, they won! “At this point it was decided to contact Arup to ask them to review their fees, with a view to reducing them, leading to a second submission”.

4. But no other suppliers were given the chance to re-submit pricing, or look at their tender in other ways. A hint here and there from TfL might have meant another firm could have improved their technical offer for example. “None of the other bidders were given the opportunity to revise their submissions and there was no Best And Final Offer stage included in the procurement. It would have been best practice to have done this”.

To any non-procurement readers, I can’t stress this strongly enough - you just can’t treat suppliers so differently and have those conversations with one favourite half way through a tender (even if it is a call-off against a framework). This is not a case of “best practice” as the audit puts it – the EU treaty principle of equal treatment is law. This is from the UK Public Contracts Regulations 2015 – pretty clear, really.

Principles of procurement

18.—(1) Contracting authorities shall treat economic operators equally and without discrimination and shall act in a transparent and proportionate manner.

That point on equal treatment and the way it was disregarded here raises questions about more than just competence, to be frank. I once acted as an expert witness in a procurement corruption case (connected with the MOD in Northern Ireland many years ago), and if we had seen that sort of favouritism in the evidence, we would have expected any judge to assume there was corruption involved. No-one is blaming Arup here, and I’m sure no brown envelopes changed hands, but there are different forms of corruption.

So the audit comment that the procurements did not follow TfL good practice or internal regulations is understating it somewhat. TfL broke the law, simple as that, and it is a great shame no other bidder has challenged the decision in the courts.

 

Voices (14)

  1. Little Acorn:

    If Dan’s indication that their initial bid of £173k is right could this appear to suggest a bidding strategy of – it’s not an EU tender so we’ll push the price to the threshold (£173,514) rather than bidding a genuine price for the required work? How does a re-submission (which is of course not permitted) manage to drop the tendered price by a third?

    1. Dan:

      Heatherwick quoted £173k (putting it suspiciously close to OJEU without actually breaching the threshold, as you say). There was a significant variation in prices from the other two (which is a sign of a poorly spec’d job), so the price was fixed by TfL at £60k and everyone given the same score.

  2. Lionel Botch:

    I suppose we can relax in the knowledge that this cannot happen if / when the CIPS licensing campaign to clean up the profession comes into force as discussed this morning at the CIPS conference…

  3. T Banks:

    For some TfL background info, do have an enlightening read of the January 2015 minutes of the Opposed TfL Bill from which you can get a good idea of how they like to operate. If I’ve understood correctly, it seems that TfL prefers Secretary of State ‘consent in writing’ as it’s in secret, whereas an amendment to clause 5 was imposed by the Committee hearing the oral evidence in January was so that it be via Consent Order as that is a Statutory Instrument which means the public can get to know about it. (I believe TfL had originally wanted to be able to form Limited Partnerships without Secretary of State approval which seemingly could risk enormous liability.)
    Here’s the page address for those minutes:
    http://www.publications.parliament.uk/pa/privbill/201415/tfl130115.htm

  4. Dan:

    This is just bringing public procurers into disrepute, highlighting their incompetence in such a manner. Honestly, did they not know how to do this without being caught out?

    Only joking of course. I’m surprised there isn’t an email from procurement to whoever was making those decisions outlining why it was a bad idea, but this is just shocking. The idea of appointing someone to design a bridge who had no experience of doing this sends shivers down my spine. Maybe they should make whoever appointed them stand underneath it when its opened?

    And as for the whole rigmarole around the pricing, someone should be sacked. Simply unbelievable. It won’t happen of course, because this stinks of pressure being applied from the Mayor’s office.

  5. Nick @ Market Dojo:

    This is appalling! I’d expect someone like Vladimir Putin to flagrantly ignore the rules to get the desired outcome, but not the TfL.

    I can’t understand in this day and age of commoditised eTendering tools how key evaluation material was lost. I suppose my first assumption, given the fixed contract value of £60k, is that this tender is sub-OJEU.

    If so, it really does spell out the need for public sector bodies to continue to invest in eTools for low value procurement to avoid what really should have resulted in a challenge. Yes the current tools on the market are hugely complex and cater for to end-to-end OJEU regulated tenders, but there are alternative eTools that let you do the quick and easy ‘3 bids and a buy’ via an audited, professional MEAT approach.

    As for giving one bidder the chance to revise their offer and not the others, well that simply should mean game over for this contract award. If you want bidders to revise their pricing, run an eAuction. Be fair, transparent and equitable about it. Honestly….very dodgy stuff and makes you wonder how much more of this goes on today.

  6. C Medland:

    If a crime has been committed it should be reported to the police and CPS

    1. Peter Smith:

      I think it would be a civil rather than criminal issue, so you wold sue in court rather than a police prosecution, unless there was corruption or “malfeasance in public office” or whatever they call it …

      1. Michael Ball:

        Yes malfeasance in public office is precisely what needs to be investigated. Boris personally pushed for TfL to take up this project in 2012 on the basis of backroom conversations with personal friends, and people in TfL have clearly bent the rules to enable Boris’ friends to prosper. This has cost the public purse £20m so far and will cost a further £40m plus £3.5m every year if it proceeds.

        The Met should be investigating.

        1. T Banks:

          Have an enlightening read of the January 2015 minutes of the Opposed TfL Bill in which you can get a good idea of how they like to operate. If I’ve understood correctly, it seems that Secretary of State consent in writing is in secret whereas via Consent Order it is a Statutory Instrument and so the public can get to know about it?
          Here’s the page address for those minutes:
          http://www.publications.parliament.uk/pa/privbill/201415/tfl130115.htm

  7. Lionel Botch:

    Excellent article Peter and it does beg the question as to why none of the other bidders challenged this in court. I find this very strange indeed.

    1. Dan:

      Because its sub-OJEU services and therefore the cost of challenging this in court will far outweigh any income they would generate from the contract (if they were subsequently awarded it) or from any damages.

      1. Michael Ball:

        No, this contract is not sub-OJEU, it’s worth £8.5m so plenty of potential income lost for which damages could be awarded

        1. Dan:

          The Heatherwick contract was certainly sub-OJEU at £60k (even though their initial bid was the highest at £173k)

          The Arup contract was awarded via minicompetition through a framework, so it would depend on what the terms of that framework actually are.

Discuss this:

Your email address will not be published. Required fields are marked *