Drama on the West Coast Mainline

If not Murder on the Orient Express, then certainly Red Faces at the Department for Transport!

Procurement law is headline news today, following a dramatic midnight announcement by the government that it is dropping the controversial award of the West Coast Mainline franchise to FirstGroup. The announcement came only hours before the complaints about the procurement process raised by the current operator, Virgin Trains, were due to be scrutinized by the High Court.

The transport secretary, Patrick McLoughlin, admitted that the procurement process was flawed and that this was entirely the fault of civil servants within his department. Three people involved in the process have been suspended from their duties and a review is underway. The details are a little hazy, but the flaws in the procurement seem to have been around the way the department calculated and scored the risks attached to each of the four bids, and, in particular, the level of security payments offered as a guarantee by FirstGroup, in the event it ran into problems with the operation of the contract.

Various press articles have commented that around ?40 million will be paid to the four bidders by way of compensation for wasted costs. This is interesting, as, of course, the usual scenario is for the contracting authority, in the contract documents, to reserve the right to abandon the process at any point and state that bidders will have no claim for wasted bid costs.

Further details will undoubtedly emerge and we will update you when they do.

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