On the wrong track
The recent decision by the British government to award the £1.4 billion Thameslink contract to Siemens rather than to Bombardier, its UK-based rival, has far-reaching consequences for the 1,400 Derby-based workers facing redundancy.
Two aspects of the news coverage of the event stood out for me. First, there was the apparent lack of emphasis placed by the government on the resulting job losses at a time when most large corporates are expanding their approach to responsible procurement beyond the staples of environmental impact and worker welfare. The government, however, chose not to reflect that trend in its decision-making process at all.
Second, a significant element of the decision seemed to have been made because Siemens is more able to provide the financing to build the trains. While this is an important factor when money is tight, it doesn’t seem sensible to put it ahead of other factors. If press reports are correct, it seems the Siemens bid had offered an incomplete and untested design of the 1,200 axles (bogies) for the carriages. This is a high-risk approach, with cost and time variables likely to be put under pressure. Siemans said last month, though, that the bogie it will use on Thameslink is based on proven subsystems.
From the outside, it’s hard to understand a decision that seems to be based on cost or financing alone. It is, therefore, not surprising that at the time of writing the government is under considerable pressure to reverse its decision.
* Sticking with the theme of unfathomable government decisions, a recent interview with Richard Alderman, director of the Serious Fraud Office (SFO), highlighted an interesting dilemma. Just as the SFO had expanded its remit to include the investigation and prosecution of overseas corruption cases under the 2010 Bribery Act, it has had to cope with a 10 per cent reduction in funding.
At a time when instances of fraud are on the increase (the SFO caseload, for example, has tripled in the past three years), it seems a bizarre move to stretch resources even more thinly than is already the case.
The SFO is focused on finding ways to do more with less, but there is concern that it will need to step away from investigating the more resource intensive and potentially messy high-profile and complex cases.
Individuals and organisations alike have self-regulated their behaviours because they fear being caught and the possible repercussions of prosecution. Despite this, as procurement officers, we still uncover or identify fraudulent activities because we have a unique insight into and across the organisations we work in.
Many times, however, it is simply the process we follow or the transparency that we strive for that ensures fraud doesn’t happen on our watch.
I cannot help but feel that the government’s cuts in this area have just made our jobs that little bit more difficult.
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Re the Bombardier issues. Its a it late in the day for everybody to jump on the bandwagon and start slating the Government. The award criteria were developed years ago. Presumably by people who gave the jobs situation in Derby some thought. As you know, once you have published your criteria for assessment and the relative weightings of each element that is what you must use. It is a frequent complaint when the ‘supplier we wanted’ is not awarded the contract. What can be done though, without breaching the European Directives, and the UK Contract Regulations?
Really this emphasises the requirement to do your homework thoroughly before advertising your requirements.
In this instance Siemens, as good europeans would no doubt challenge any ‘adjustment to the scores’ which left them out in the cold, leaving our Governments both past (for they set the criteria) and present with egg on their collectve faces.
Sam Covell’s comment on the Bombardier / Thameslink issue betrays a fairly shocking lack of understanding of the regulated environment which public procurement finds itself in. For a private company it’s a skoosh – stick economic impact / local supply chain support in your CSR statement and (subject to maintaining margins) Bob’s your parental sibling. It’s just not that easy for public bodies and we’re just not that thick as to forget – whoops! – about the worth of supporting economic sustainability with our (or rather, your) procurement money.
It’s a fundamental (and not that unfathomable) principle of the EU Treaties that you can’t discriminate in favour of local providers and against non-locals. Jobs impact included. Do you remember the knots the UK Parliament Building got itself into over “Buying British”? What is it about the “common market” that you’re not getting?
I’m not advocating that as a good thing at all – on the contrary, all public purchasing bodies (perticularly local authorities, I’d suggest) would wish it otherwise. That’s the very reason why the Scottish Government is making representations on the EC’s Green Paper on the modernisation of EU public procurement legislation seeking reform of the rules allowing contracting authorities to maximise the local economic impact of their procurement spend(granted, given the impact that might have on the fundamental non-discrimination principle, we’ll see that the EC say in response but it’s worth a try?). And before the predictable “well the French and Germans seem to get away with it don’t they?” is trotted out, have a look at the published decisions of the ECJ and see how may times the governments of France, Germany, Greece, etc. get decisions against them. Do you have any idea how much a judgement against you in the ECJ costs??
You’re not “on the outside” Sam – you’re a procurement professional. C’mon Supply Management – we’re entitled to better from your columnists (they still do EU Procurement as part of MCIPS don’t they??)