Sir Richard Branson seems hopping mad…and well he might, after losing what had become his “baby”, the West Coast rail contract, after 15 years. Speaking as a Northerner who has lived with West Coast travel through the Virgin years, I can say that the service has gradually improved…the constraining factor seems to have been the track not the trains.
Sir Richard claims that the contract has been awarded on the basis of price, which he thinks will be unsustainable as happened in 2007 and in 2009 when the Department of Transport had to take back the East Coast line because the companies awarded the contract could not afford to run it.
Will this contract fail as many have in the past? I expect it will. I used to get the train into work (if I couldn’t avoid it) and remember the announcements while we were stationary at platforms where staff were trying to crush commuters onto already full trains…”we are not going anywhere until you all move up together”. FirstGroup who have won the bid said that they expect the number of passengers to rise…where do they think these passengers are going to come from?
Government purchasers never seem to realise that cheapest isn’t always best…maybe you’ve heard the old saying “you don’t get sacked for buying X – (enter the name of an international supplier at X). Procurement is mostly about risk transfer…getting the job done cheapest and with minimal risk to whoever is procuring.
A recent example is the G4S fiasco. This is probably a case of the procurement team confusing “blame” and “accountability”…they can blame G4S but they themselves will always be accountable.
Look also at the LSP contracts placed by NHS Connecting for Health…litigation and counter-litigation virtually guaranteed from the start.
SMEs are more likely to be awarded public sector contracts in Scotland than in England and as an SME I’m not surprised by that, considering the level of knowledge amongst the buying community…”big” is seen to be the safest way forward.
But then what is safe? Government have agreed mechanisms to identify suppliers who don’t deliver…which is astounding this late in the game. Most of the population knows how to pick and choose their “suppliers” based on performance…