Virgin Rail and the right to challenge

The origins of the Virgin Rail scandal last month rapidly became lost in the recrimination and blame, as the Department for Transport attempt to apportion culpability and pundits discuss the role and capabilities of the civil service. When self-styled “tie-wearing adventurer” Richard Branson launched his legal challenge to the West Coast franchise decision two months ago, it was widely regarded as a knee-jerk, even ill-considered action of a man known for scrappy battles on behalf of his business.

The DfT was due to award a long term franchise to FirstGroup until “significant technical flaws” became evident during their preparations for the Virgin lawsuit. These flaws became evident in the risk assessments of First’s winning bid.

Virgin faced substantial risks in mounting a challenge to the DfT. Some of these risks were revealed in the initial media coverage of the challenge that portrayed Richard Branson as an opportunist and a sore loser (not helped by Virgin Rail’s relatively poor public reputation). If the legal case had failed Virgin’s commercial reputation (and finances) would have suffered.

They had a number of options, all of them risky:

Under Public Procurement law Virgin could mount a formal challenge. To do this they would have to allege that the contracting authority has run the process in an unfair or opaque manner. If they were successful in this, the contract award would have to be suspended while the issue is resolved – allowing more time to discover exactly what happened (and why they lost).

Their second option would be a judicial review. They would need to show a public interest in such an action – easily achieved, given the political climate – but the latter stage would be more difficult. Virgin would essentially have to prove that no reasonable authority would have made the contract decision. Before the events of last month, this was considered unlikely to happen.

In the event, Virgin were able to prove that large parts of the process was flawed. The DfT has spent the last few weeks apportioning blame, mainly directing it at the civil servants involved. In turn, there has been a lot of scrutiny directed at the structure of the procurement process –

A great many qualified professionals have been lured out the public sector by higher wages in recent months, and this, combined with poor systems of review, greatly contributed to the fiasco. We have been discussing government initiatives on this blog for months – all of them seem doomed to failure if the Civil Service can’t do something to arrest the skills gap in government procurement.

Richard Branson’s decision to challenge has been vindicated. The DfT has ordered a number of independent reviews and Virgin has been awarded a short term contract under circumstances that some rivals claim were actively uncompetitive (there should have been a tender for the contract extension). Since the fiasco Virgin has changed strategy dramatically, aiming to expand its market share into the East Coast lines that GNER and National Express mismanaged back into government hands three years ago (under contracts similar to the one offered to FirstGroup). They will likely also retain the West Coast franchise in the long term, if they can see off competition from Abellio.

Virgin Rail weighed up the risks inherent in challenging the bid and made the strategic decision to do. Meanwhile, we’ve been noticing that numerous tenders are having their deadlines put back – maybe as a result of jumpy procurement officials? Win that Bid can help you weigh up the risks in your own bids, and comprehend the contracting authority.

New procurement rules in Scotland

The Sustainable Procurement Bill passing through the Scottish Parliament aims to open up new public sector opportunities by making the public sector tender process more standardised and transparent.

Complaints in the construction industry were a major driving force behind this bill. Industry leaders have been complaining that the existing construction tender rules were unfit for purpose and exacerbating the decline of the sector.

The Scottish government claims that the Sustainable Procurement Bill would ensure that:

  • contract opportunities are advertised or awarded through Public Contracts Scotland;
  • public bodies adopt streamlined procurement processes friendly to Scottish businesses;
  • smaller and medium companies have more opportunities to win public sector tenders.

Alex Neil (MSP) also emphasised that community benefit clauses will be an important part of the new procurement rules. He stated that the “bill will seek to ensure that major public contracts deliver training and employment opportunities”.

If it passes this bill will obviously offer advantages to Scottish businesses aiming for construction tenders. However, the simpler public sector tender processes ought to make it easier for other companies as well, especially those that emphasise their CSR and training programmes.

Get your Fish and Chips, Pies and Pasties and Chicken Tikka Massala at the London Olympics!

80% of the food served at the Olympics will be sourced from local British businesses!

Hello food lovers and entrepreneurs! Here is some great news for those of you working in the UK food and catering industry: the London 2012 Organising Committee has recently pledged in its ‘Food Vision’ http://www.london2012.com/publications/food-vision.php to serve ‘the best of British food’ during the Olympic and Paralympic Games.

And what fantastic opportunities for British businesses: 80% of the food served at the Olympics will be sourced from local British businesses – the remaining 20% being supplied by London 2012 commercial partners, Coca-Cola, McDonalds, Cadburys etc.

The recently disclosed London 2012 Food Vision aims to set new standards for catering at UK events; Local, seasonal, healthier and sustainable standards will be favored. All dairy products, beef, lamb and poultry must be British. In addition, bananas, tea, coffee and sugar will be Fairtrade. And 100% of the 19 tonnes of eggs that will be served will have to be cage-free.

And to help you get a feel for the size of the operation – a whopping 14 million meals to be served, this roughly means businesses will need to supply some:

*25,000 loaves of bread
*232 tonnes of potatoes
*82 tonnes of seafood
*31 tonnes of poultry
*100 tonnes of meat
*75,000 litres of milk
*21 tonnes of cheese (yum) and
*330 tonnes of fruit and vegetables

If you would like to be one of the lucky businesses that will cater at the Olympics, the search to find catering suppliers is now underway! For your chance of obtaining a piece of the 2012 pie (sorry couldn’t help it!) get your business onto www.competefor.co.uk And if you’re more pie filling than form filling let us foodies at Win That Bid give you a helping hand. Growing businesses is really what we do best.