UK Minister – we want our procurement to be more like France

Bombardier has lost out on a new contract for Thameslink trains to Siemens. Philip Hammond, the UK's Transport Minister, was on TV this morning explaining why the loss of 1000 plus jobs at the Bombardier train factory in Derby wasn't his government's fault.

"The procurement process was started by the previous Government....they set out the terms on which the bids would be evaluated", he said.

Interesting to speculate  how the new Government would have changed those evaluation criteria... a very high weighting given to "manufacturing in a place beginning with the letter D” perhaps? And of course the new government could have just said "we've changed the requirements so we're starting the process again" - which makes me think that a. the process was robust and b. in reality, there was little that could have been done to achieve a different result.

There have been reports that price was the main factor, so it’s hard to see quite how different evaluation criteria would have helped - other than by finding some very specific aspect of "quality" where Bombardier are better and weighting that very strongly. But that would be susceptible to challenge anyway I suspect.

The interviewer then suggested that other countries bend the procurement rules to suit themselves, whereas we British play fair.

Hammond said he didn't think we should bend the rules, but "we should certainly look at how we apply the system..I wrote to the Prime Minister suggesting we use the next phase of the growth review to look at how we apply EU rules, how we use them to support domestic supply chain in the way the French do extremely well..."

Well done the cunning, clever, calculating French!

He continued.

"In the procurement we manage over coming years, I would expect us to take a much more proactive approach to engaging with the supply chain in advance of the competition to make sure that British companies, British based companies have the maximum possible chance of doing well and winning those competitions".

A noble sentiment. Interesting to hear him quickly correct himself from British companies to British based because of course Bombardier are actually Canadian owned...

And engaging with the supply chain in advance is good practice and thoroughly recommended for large, complex procurement exercises. However, you can't just engage with British based firms unless you want a subsequent challenge - you have to engage with the entire market and offer equal access to all potential bidders.

It's actually very difficult to rig evaluation processes to favour particular suppliers - I suspect Hammond knows this (he is actually a businessman by background, and comes across as very sensible). But he may find that even the "early engagement" idea does not necessarily give you the answer you’re looking for in public procurement!

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Voices (5)

  1. Dhimmitude Ishere:

    “I have always been able to present criteria difficult to fulfil in the Pre Qualification documents by businesses too far away and we need to do this and play them at their own game or better still leave the EU.”

    So you admit to attempting to exclude companies on the basis of their location when they may actually be able to provide better value for money than those who pre-qualify for potential inclusion on the relevant tender list. This hardly seems to be protecting the interests of the tax payers who fund public sector procurement.

    One also suspects that such an approach could be the subject of a successful challenge as criteria at both PQQ and tender stage have to be germane to the procurement in question. Defending oneself against even unjustified claims that the procurement rules have been breached tends to be time-consuming and expensive.

  2. PlanBee:

    You can stack trains alongside football, bikes and a host of other things we invented and now are no longer any good at.

    Ho hum, at least the cricketers won last night – oh I forgot, we outsourced half of that to the South Africans

  3. jim:

    Having spent a lifetime in public and private sector procurement I am not quite sure how the EU rules have dominated the Bombardier order as I thought we had privatised our railways. This would meant that unless the public purse was paying for these trains the procurement would be out side the public domain.

    The rules can and are bent to suit most European Goverments agenda of keeping it’s own industry in business and we seem to be the most honest and in my opinion stupid country for playing by these rules.
    I have always been able to present criteria difficult to fulfil in the Pre Qualification documents by businesses too far away and we need to do this and play them at their own game or better still leave the EU.

  4. Hartley:

    A useful dose of reality. I seem to remember the example of a certain government department which presumably was trying to “rig” a furniture contract in favour of UK suppliers when it demanded abnormally short notice call-off of extra and replacement supplies (of desks etc). – which of course they thought would be difficult from the continent. Except that the cunning Germans just set up a warehousing operation next to the department’s offices and kept a “float” there. The UK suppliers all said that the best they could do was the standard lead-time of many weeks – so they lost.

    The attempt was perhaps based on one of the most effective ways to restrict the success of “foreign” suppliers of services, namely to demand instant access to any of the staff involved who then need to be across the road. The European Commission itself has been quite prone to make such demands, with the result that locals won a lot of business (of course the “locals” are not Belgians but are mainly non-Belgian companies that have set up in business to supply the EU institutions)..

    Hammond would probably do better at preserving UK jobs by pursuing joint purchasing between UK and other country authorities – and specifying (or more legally otherwise assuring himself in the supply chain review) that there would be offset arrangements amongst the customer countries. This just builds on the example of defence procurement practice, but has the advantage of increasing the likelihood that the UK manufacturing base is kept to internationally competitive performance standards rather than feather bedded.

    And perhaps the UK should press for the Remedies mechanisms to include either anonymous complaints or random investigations of procurements which are awarded to national champions.


  5. Dan:

    I particularly like the way that the media suggested that we should not award the contract to a foreign company like Siemens, but instead follow the example of countries like Germany, who awarded their train contract to erm…. Siemens…

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