Category: Public Procurement

A proposal: the creation of His Majesty’s Inspectorate of Public Procurement

11th October 2022

Yesterday’s post on the latest court defeat of the Good Law Project touched on a serious problem with public procurement in the United Kingdom.

The problem is, in a word, accountability.

The law of public procurement provides for special duties on public bodies (and some utilities) when they procure goods, services and works.

These special duties do not apply to private purchasers of such things.

These special duties include the legal principles of transparency and equal treatment.

One reason for these special duties is to promote competition: public supply contracts can be lucrative, and so the competition for such contracts should be as open as possible.

Another reason for these special duties is that it is a public good that public bodies are transparent and treat tenderers fairly and equally.

But.

It is one thing to have such duties, but it is another to ensure that they are enforced and observed.

The unfortunate implication of the most recent Good Law Project court defeat seems to be that it should be left to disappointed tenderers to bring legal actions in respect of non-compliance with public bodies with the legal principles of public procurement.

There is, of course, no dispute that such disappointed tenderers would have standing to bring a challenge.

But it is unrealistic to expect typical government suppliers to litigate against their customers and to accept substantial litigation and costs risks.

Sometimes it can make commercial sense for a disappointed supplier to bring such a claim, but it is rare in practice.

Typical government suppliers have no incentive to vex or irk their main customers – and, regardless of the theory that such things should not be taken into account in the next procurement exercise – upsetting major customers is not usually a sensible thing to do.

And if disappointed tenderers are disincentivised from bringing challenges, then who enforces the rules?

The courts do not seem to like self-appointed crowd-funded publicity-seeking groups like the Good Law Project bringing such challenges.

But if such groups do not bring challenges, then who will?

My own view, for what it is worth, and as a former central government public procurement lawyer, is that there should be an independent statutory body that can challenge seemingly errant public procurement exercises.

This would do domestically what the European Commission can do in respect of breaches of European Union public procurement laws.

It would be like an Office of Fair Trading or National Audit Office but for public procurement, with powers to request documents and issue sanctions.

Such a body would also be able to look at complex procurement issues in a way that a court is ill-equipped to do in litigation.

And to placate those who would not like this domestic equivalent of the European Commission, it could be called something quaint like His Majesty’s Inspectorate of Public Procurement.

The alternative – given that bodies like the Good Law Project are not to have standing – is to have a system of law that is supposed to act in the public interest which is, in effect, unenforceable other than by the untypical and occasional, desperate and litigious government supplier.

The “public” needs to be put back into public procurement, and this is one proposal for how that can be done.

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The Good Law Project has had another bad day in court – but this decision raises serious questions about enforcing the “public” element of “public procurement”

10th October 2022

The Good Law Project (GLP) has had yet another bad day in court.

Many are uncritical fans of the the GLP – I am not, but neither am I a committed opponent of it either.

But there is something in the recent defeat which I think should prompt wider discussion.

For not only did the GLP lose the case on the substance, it also lost outright on the question of “standing” – that is whether it was in the legal position to bring the case in the first place.

In essence: the GLP was not an “economic operator” adversely affected by the procurement decisions in question, and so it was not able to bring an application for judicial review.

If you read the court’s reasoning on this – from paragraph 498 onwards – you can see the judge’s points.

But.

The law of public procurement is distinct from the law relating to procurement generally because public authorities have to comply with certain public law principles when making decisions – principles with which a private entity making procurement decisions do not need to comply.

This is because those principles – such as transparency, equal treatment and so on – are for the public benefit, and not just the interests of the (potential) bidders.

And if these principles are to have teeth – that is, if they are to make a difference – then they need to be enforceable.

Else they are polite fictions.

An adversely affected competitor may perhaps have a private commercial interest in challenging a botched public procurement decision.

But that will be on private, selfish grounds – and not out of some sense of altruism.

So how are the unselfish public law principles to be enforced?

Given these principles are there to benefit the public generally, should it only be left to when the breach of principle overlaps with the private interests of a disappointed competitor?

One answer is to give bodies such as GLP standing to bring claims.

But the import of this judgment is that such a wide view is not valid.

And perhaps there are questions to be asked about self-appointed interest groups bring such strategic and tactical litigation.

But if not groups such as GLP, then who?

In the European Union there is an easy answer: the European Commission can bring proceedings for breaches of European Union procurement law.

But there is no such body in domestic law: there is not really a public procurement equivalent to the Office of Fair Trading.

Perhaps there should be.

But, with this decision on standing, it is not obvious what the “public” means in “public procurement”.

Yes, the GLP has many critics – and some of those criticisms are valid – but there is also something not quite right about a system of “public procurement” where the public law principles of transparency, equal treatment, and so on, can only be enforced if they happen to coincide with the private interests of a competing economic operator willing to assume litigation risk against a major customer.

(And few – if any – regular government suppliers want to litigate against their main customers, as it leaves a poor impression for the next tender.)

If the courts are going to take this strict view of standing, then the “public” element now needs to be built into the process some other way.

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FoI requests regarding the “absolutely devastating” legal advice

30th September 2022

The Freedom of Information Act of the United Kingdom is not an impressive statute.

I have known this from the beginning, for I was a government lawyer when the Act took effect.

I even attended meetings of the now notorious “clearing house” at the Cabinet Office that considered certain complex and/or cross-governmental requests.

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The Act has no bite – unless you want to spend a considerable amount of time challenging decisions all the way to court.

If a public authority does not want to give you the information requested then it will usually find a basis for not doing so.

There is perhaps no more insincere a genre of official correspondence than FoI letters saying that exemptions apply, additional time is needed and balancing exercises need to be conducted – all of which are, in reality, delaying tactics which end up with no information being willingly disclosed.

Everyone concerned knows this – those requesting the information, the FoI officers, and their internal clients.

It makes you think of this classic Onion story:

Everyone involved in making a FoI request, handling a FoI request, considering a FoI request extremely cynical.

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But.

From time to time, FoI requests may be useful.

And in respect of the “absolutely devastating” legal advice previously discussed on this blog – see here and here – FoI requests may be interesting.

This is partly because by publishing the advice on 2 September 2022 the government waived legal advice privilege in that advice.

The usual go-to privilege exemption for government in respect of FoI requests for matters concerning legal advice is, in my view, no longer available for the government here.

And by going to an external law firm, rather than using the government legal service, the usual go-to exemption of commercial interests is less strong for the government, as there is a public interest in openness about whether this procurement actually provided value for money.

The immediate publication of the advice on the gov.uk website also raises a further public interest in favour of disclosure, given that it appears to have been an attempt to bounce the privileges committee.

As the committee stated:

My FoI requests are here, where you will be able to follow their (lack of) progress.

Each request seeks disclosure of particular information and there is method in the madness of how I have arranged and framed the requests – in particular how they are arranged and framed so as to strengthen the (inevitable) appeals.

I have no illusions that the government will not disclose this information happily, and so I am thinking backwards from the (inevitable) appeals.

“Everyone involved in making a FoI request, handling a FoI request, considering a FoI request extremely cynical.”

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My motivation, for what it is worth, has little or nothing to do with whether the former Prime Minister is disciplined or not by the privileges committee.

That is a matter for the committee and parliament, and I do not really care either way, as long as the committee and parliament are satisfied.

My concern, as a former government lawyer, is that there is something deeply wrong for any government (of any party) to use and publish legal advice in this manner.

Legal advice is legal advice, and government communications are government communications, and there should be little public overlap.

And this is especially the case where it appears an opinion was sought not for legal advice, but to be published and publicised so as to influence a parliamentary committee and to place public and media pressure on that committee.

It would not matter if that was Boris Johnson or Jeremy Corbyn or Elizabeth Truss as Prime Minister.

Something wrong happened here, and it really should not happen again.

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It is easy to get trade deals – if you accept what you are offered, and drop what you want

8th September 2021

I was once a central government lawyer for two-and-a-half years, dealing with public procurement, freedom of information and general commercial matters.

And one of the tasks I had was to support the United Kingdom (and thereby European Union) negotiators on the revision to the WTO agreement on public procurement.

This was exciting: international trade law!

How wrong I was.

In the two-and-a-half years I assisted on the the revision to the WTO agreement on public procurement, I do not think the negotiation moved forward substantially one jot.

(This was not my fault.)

In the words of the WTO website:

“Not long after the implementation of the GPA 1994, the GPA parties initiated the renegotiation of the Agreement according to Article XXIV:9 of the 1994 Agreement. The negotiation was concluded in December 2011 and the outcome of the negotiations was formally adopted in March 2012.”

So: 1994 to 2012.

Eighteen years – to revise an agreement already in existence and the revision of which most parties to the agreement broadly were in agreement with.

Eighteen years.

My two-and-a-half years was in the middle of that period, and that period were not much more than a splash in a river.

Negotiators came and went for all parties, and one suspects there was not anyone engaged with the end of the agreement who had been concerned with it from the beginning.

The one thing I learned was that international trade and commercial agreements can be slow: very slow.

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But international trade and commercial agreements can also be quick: very quick.

One way that can be quick is if they are rollover agreements, a copy-and-paste of what was in place before and which all the parties are happy with.

Another way is to just accept what is on offer and to drop any demand which will not be met.

Such capitulations can be done very quickly indeed.

And so here is today’s news:

Of course: a trade agreement with Australia sounds very glamorous.

The sort of news that would make certain people gladdened just because of the anglophone, commonwealth connotation.

But a new trade agreement entered into at speed, other than a rollover, will tend to be to the disadvantage of one party and not the other.

Any trade deal that is worthwhile for both or all sides will not be done at speed.

We were once told that ‘no deal’ was better than a ‘bad deal’ by those who now clap and cheer at any deal.

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Whatever happened to ‘regime change’?

16th August 2021

Once upon a time geopolitics seemed so much easier.

As Christopher Hitchens commented back in 2001, after 9/11:

‘The Taliban will soon be history. Al-Qaida will take longer. There will be other mutants to fight. But if, as the peaceniks like to moan, more Bin Ladens will spring up to take his place, I can offer this assurance: should that be the case, there are many many more who will also spring up to kill him all over again.’

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I was one of those who nodded-along with Hitchens at the time, but I quickly realised the reality of ‘regime change’ did not correspond to what was said in sterling newspaper columns and comment pieces.

And by the time of the Iraq invasion (with which I did not nod-along) it was plain that no actual thought was going into what happened next in any of these adventures.

Now, twenty years after the invasion of Afghanistan, the west are retreating in circumstances which show that there was never any practical, sustainable plan for ‘regime change’.

Indeed, instead of a changed regime in Afghanistan, we have a regime resumed.

And the full resumption only took a day, after some twenty years of occupation.

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Back in 2017, at the Financial Times, I put the calls for ‘regime change’ together with other simple notions from the first part of this century, as part of a general politics of easy answers:

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I remember as a United Kingdom government lawyer around 2003/4 being asked to help on a commercial procurement matter involving the Coalition Provisional Authority in Iraq.

I did not have much idea what I was doing, though I did my best – and it was soon obvious that nobody at the Coalition Provisional Authority knew what they were doing.

I remember thinking at the time that it is one thing to clap and cheer at ‘regime change’ but for it to happen in reality was quite different.

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This is not to argue absolutely against military interventions – either ‘liberal’ or otherwise.

What it is an argument against, however, is the notion that ‘regime changes’ are easy, or even effective.

Interventions are not political exorcisms, where the demons are expelled forever.

Instead, the notion of ‘regime change’ is a form of magical thinking.

And it always was.

**

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Is there a business case in existence for the announced ‘National Flagship’?

23rd June 2021

When the proposed new national flagship was announced, there were a number of odd things about the announcement.

(Please see this earlier post on this blog, especially the many highly informed and insightful comments beneath.)

One thing which seemed especially odd was that it was announced by the prime minister’s office – and the only mention of the royal navy or of the ministry of defence was that navy would crew the boat.

There was no mention – explicitly – of which government department would pay the procurement/commissioning of the ship – nor of which government department would be responsible for its envisaged thirty years of maintenance and repair.

As a former central government public procurement lawyer, this seemed strange.

The announcement seemed, well, just flimsy – the shallowest of press releases.

Since then it has become obvious why the announcement was so flimsy.

The reason is that the thinking behind the announcement also has been flimsy – if it can be characterised as thinking at all.

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As the Sunday Times has now reported:

‘The Cabinet Office, which was originally asked to devise the plans, the Department for International Trade, which was originally expected to benefit from them, and the Ministry of Defence, which has now been saddled with the project, are all in the dark about where the money is coming from, not least because the MoD is fighting to plug a £16 billion black hole in its annual budget.

[…]

“‘Another official confirmed: “The royal yacht is a complete and utter shitshow. When it was first floated, the PM wanted it to be built in Britain. It was given to [Cabinet Office minister Michael] Gove to sort out, but it became clear that under procurement rules it could only be built here if it was a navy thing with a bunch of fake weapons on board. So Gove passed it on to the MoD. The Treasury stayed out of it.’

None of this is a surprise; indeed, all of this can be inferred just from a close critical reading of the original announcement.

Anybody with even the most basic awareness of public procurement would realise that if this was a civil (non-military) project, there could be no legal restrictions as to which tenderers would be considered.

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Now the Guardian is reporting:

‘Downing Street has backed down from insisting that the Ministry of Defence should foot the whole bill for new royal yacht Britannia in a Whitehall row about the funding of the £200m vessel.

[…]

‘The Ministry of Defence (MoD) is resisting being lumbered with the cost of the project at a time when it is trying to fill a £16bn backlog in its equipment budget.

‘On Monday, Downing Street indicated that the yacht would be paid for out of the defence budget, with a spokesperson saying: “The procurement process, which is being done through the MoD, will reflect its wide-ranging use and so it will be funded through the MoD.”

[…]

‘No 10 then clarified on Tuesday that the MoD would initially only pay for the procurement process, and that the rest of the costs has not been allocated.

‘A Downing Street spokesperson said: “This is a ship that will promote UK trade and drive investment back into our country. So we expect any costs of building and operating the ship will be outweighed by the economic benefits that it brings over its 30-year lifespan.”’

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This is what public policy-making and decision-making looks like when it is made up as it goes along.

The most plausible explanation is that nobody in government has a clue about how to go about the procurement exercise for this boat.

I am not a lobby journalist – and so I can add not other telling quotes from insiders, but I can add something.

Prompted by the announcement, I thought I would make a freedom of information request.

I made the request to the cabinet office, on the understanding that the cabinet office was the department responsible for that announcement of national flagship – and that was also the department that would deal with freedom of information requests for the prime minister’s office.

And today came the response to the request.

The cabinet office does not possess a business case for the national flagship – even though it was the department that announced it.

This odd situation can perhaps be explained as follows, either:

– there is a business case held in Downing Street, but my request clumsily missed it;

– there is a business case held in Downing Street, but the cabinet office has given me false information;

– there is a business case for this announced procurement, but it is held in another government department and has not been shared with the prime minister’s office or the cabinet office; or

– there is no business case, despite the public announcement.

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What we do know is that a business case should always precede a procurement exercise – and so the fact that a government department may then handle the procurement exercise does not mean that the business case is then created.

That would be to put the dinghy before the boat.

Business cases precede procurement exercises – and should determine whether there is a procurement exercise or not.

The reasonable suspicion of anyone following this daft exercise is that there is no business case – and that this prestige procurement was announced without any preliminary thought whatsoever.

And now the government cannot back down.

And this is how £200 million (at least) is to be spent by the government.

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POSTSCRIPT

I have now found this fascinating parliamentary answer – there appears to be no ‘assessment’, only ‘discussions’.

I have set out further information from answers to parliamentary questions in this thread:

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There cannot be ‘Public Sector Reform’ without genuine transparency and a general duty of candour

20th June 2021

(This is the third in a trilogy of short posts about the accountability of the United Kingdom state – see Garbage in, Garbage Out and The Accountability Gap.)

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Every so often there will be some politician – usually Michael Gove but sometimes someone else – who will urge that there be ‘public sector reform’.

This reform should be ‘radical’ or ‘fundamental’.

Heads will nod, and hands may even clap.

Worthy pdfs will be clicked on earnestly, only for the tabs to be then left unread.

And then nothing really happens until the next time some politician – usually Michael Gove but perhaps someone else – will urge that there be ‘public sector reform’.

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What is often missing in many of these heady, fine-sounding proposals is the one thing that would genuinely be radical or fundamental.

This would be to force public sector bodies to disclose information against their will.

For as long as public bodies – politicians and officials – can pick and choose what information can be disclosed publicly, there can never be any meaningful reform of the public sector.

There needs to be a tension – a check and a balance – in respect of any public body’s estimation of itself and its performance.

Unfortunately – as typified by the cabinet office under Michael Gove – there is a general public sector disdain for transparency and freedom of information.

There always seems to be some reason to keep public sector information secret – from ‘national security’ to ‘commercial confidentiality’.

Indeed, the most dismal and insincere official documents in existence are freedom of information non-disclosure decision letters.

Everyone involved knows that the content of such letters is faithless guff – but nobody with any power seems to care.

When there is no duty of disclosure and no duty of candour there can be no holding of the public sector to account.

And if there is no way of holding the public sector to account then any ‘public sector reform’ will not succeed against the private interests of the officials and politicians involved – nor against the interests of external suppliers.

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So, to mimic David Hume, there is something to ask of any public sector reform, whether it is proposed by Michael Gove or somebody else:

Will the proposed public sector reform result in the public sector disclosing information that it otherwise would be unwilling to disclose?

No?

Will the proposed public sector reform mean that officials and politicians – and relevant third parties – being candid when they otherwise would not be?

No?

Then commit the proposed public sector reform to the flames, for it will contain nothing but sophistry and illusion.

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Judicial review, Dominic Cummings and ‘Potemkin paper trails’ – and why courts require reasons for certain decisions

11th June 2021

In three tweets in a thread posted this week, Dominic Cummings, the former assistant to the prime minister, refers to ‘Potemkin’ paper trails and meetings.

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What does he mean?

And does he have a point?

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What he is alluding to, of course, are the ‘Potemkin’ villages, where things in bad conditions were dressed up to be in good conditions so as to mislead others.

In the context of judicial review, Cummings presumably does not mean that bad reasons would be dressed up as good reasons.

What he instead intends to mean is that there could be artificial reasons and contrived meetings the purpose of which was to make a decision judge-proof.

To a certain extent, he has a point.

In the judicial review case in question, had there been evidence of officials conducting any form of evaluation exercise then the tender award may have been harder to attack legally.

And such an exercise could, in reality, have been nothing other than going through the motions rather than anything that could have actually led to another agency actually getting this valuable contract.

But this is not the reason the courts require reasons for certain decisions – and it may not have changed the judgment in this case either.

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Judges and courts are not stupid and naive.

Judges and courts know full well reasons can be artificial and contrived.

The judges were once barristers and solicitors and, as such, they would have had considerable experience of advising clients on providing reasons for certain decisions. 

The purpose of requiring reasons for decisions – and for ministers and officials to say they are true reasons – is to make it more difficult for bad and false decisions to be made.

For example – take the decision by the government to seek a prorogation of parliament in 2019.

No minister or official – or adviser – was willing to sign a witness statement (under pain of perjury) as to the true reason for advising the Queen to prorogue parliament.

And without such a sworn (or affirmed) reason, the government lost the case.

Reasons also provide a reviewing court with a basis of assessing whether a decision was so unreasonable that no reasonable decision could have made it, and also of assessing whether relevant considerations had been included and irrelevant considerations were excluded.

Providing reasons does not provide an escape route for cynical and irrelevant and unreasonable decision-making.

But it is an impediment, and one that makes it harder for ministers and officials to get away with bad decision-making. 

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And in the recent judicial review, it is not clear to me (as a former central government procurement lawyer) that even an artificial ‘Potemkin’ exercise would have necessarily saved the decision from legal attack.

Awarding a high-value contract to cronies where a nominal (though documented)  exercise of discretion had not shown any actual objective advantage over other possible suppliers would still have been open to legal attack.

So this is not necessarily a case where the failure to provide a ‘Potemkin’ paper trail is to blame for the loss of a legal case.

The pram may well have fallen down the stairs anyway.

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Why is it so difficult to prosecute for the sale and purchase of peerages?

7th June 2021

A person is in the news because they donated £500,000 to a political party days after taking a seat in the house of lords.

This post is not about that person.

I have no idea about the circumstances of that appointment. and so I do not make any allegations in respect of those circumstances – and this is not just safe libel-speak, I genuinely do not know, and nor (I suspect) do you.

(And anyone commenting below who makes an allegation of criminality in respect of that appointment – or anyone else – will not have their comments published – this is not Twitter, you know.)

This post is instead about the legislation that is usually mentioned when such appointments are made: the Honours (Prevention of Abuses) Act 1925.

It is a curious statute – not least because the offences it creates appear hardly to have ever been successfully prosecuted.

(The one early exception appears to be Maundy Gregory.)

 

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The legislation has one substantive clause that in turn creates two offences.

The first offence is (and in language itself as cumbersome as the name, title and style of any obscure peerage):

‘If any person accepts or obtains or agrees to accept or attempts to obtain from any person, for himself or for any other person, or for any purpose, any gift, money or valuable consideration as an inducement or reward for procuring or assisting or endeavouring to procure the grant of a dignity or title of honour to any person, or otherwise in connection with such a grant, he shall be guilty of a misdemeanour.’

Let’s try to make sense of this word-soup.

This first offence relates to the person who is (in effect) on the supply-side of a relevant transaction – the person ‘accepting or obtaining’ the ‘inducement or reward’.

This supplier has to be shown to (a) accept, (b) obtain, (c) agree to accept, or (d) attempt to obtain [x] in return for [y].

The [x], in turn comprises two things: (a) any gift, money or valuable consideration which also has the quality (b) of being an inducement or reward for procuring or assisting or endeavouring to procure the grant of [y].

This means proof of a ‘gift, money or valuable consideration’ is not enough: there also needs to be proof of its purpose.

The [y] is the most straightforward: ‘the grant of a dignity or title of honour to any person, or otherwise in connection with such a grant’.

What all this means is that showing there is cash and an appointment is not enough: there has to be proof of intention to the criminal standard of proof – that is (in general terms) beyond reasonable doubt.

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The second offence deals with (in effect) the demand-side:

‘If any person gives, or agrees or proposes to give, or offers to any person any gift, money or valuable consideration as an inducement or reward for procuring or assisting or endeavouring to procure the grant of a dignity or title of honour to any person, or otherwise in connection with such a grant, he shall be guilty of a misdemeanour.’

There is no need to unpack this like the first offence – but you will notice that again there is the need to prove that the ‘gift, money or valuable consideration’ is for the purpose of bing an inducement or a reward.

So, as before, showing there is cash and an appointment is not enough – there needs to be proof of intention.

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Those with good political memories will recall the ‘cash for honours’ investigation of 2006-2007.

This investigation included the extraordinary moment of a dawn-raid on the home of a government official and the questioning by the police of the then prime minister.

All very dramatic.

But nothing came of it.

No charges were brought.

The Crown Prosecution Service provided detailed, legalistic reasons for their decision not to prosecute.

The CPS averred that not only did it need to prove intention (on both sides) but also that it also had to prove that there was an agreement:

‘If one person makes an offer, etc, in the hope or expectation of being granted an honour, or in the belief that it might put him/her in a more favourable position when nominations are subsequently being considered, that does not of itself constitute an offence. Conversely, if one person grants, etc, an honour to another in recognition of (in effect, as a reward for) the fact that that other has made a gift, etc, that does not of itself constitute an offence. For a case to proceed, the prosecution must have a realistic prospect of being able to prove that the two people agreed that the gift, etc, was in exchange for an honour.’

These CPS reasons were compiled and endorsed by some very clever criminal lawyers – though the rest of us may struggle to see the absolute need for proving an agreement under the 1925 Act.

Nonetheless the CPS insisted:

‘In essence, the conduct which the 1925 Act makes criminal is the agreement, or the offer, to buy and sell dignities or titles of honour. Section 1(1) is drafted in wide terms and captures any agreement in which a seller agrees to procure a peerage in return for money or other valuable consideration. Section 1(2) is also drafted in wide terms and captures any agreement in which a buyer agrees to provide money or other valuable consideration, in order to induce a seller to procure a peerage.’

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If the CPS are correct in this interpretation and construction of the statutory offences, then this makes it hard, if not impossible, for the offence ever to be prosecuted successfully.

And, even without the CPS gloss, the requirement to show intention made the offence hard to prosecute in the first place.

There may be other laws which may apply – for example, fraud legislation – but not the one piece of legislation that actually has the sale of honours as its dedicated purpose.

For, as long as those involved make sure there is no paper-trail and that the choreography of nods-and-winks are done in the right order, there is no real danger of any prosecution under the 1925 Act.

What the 1925 Act prevents is the blatant Lloyd-George style of an open market for the sale and purchase of honours.

For a statute to only regulate (in effect) the seemliness of the trade in peerages and other titles is a very, well, British (or English) thing to do.

Otherwise, the 1925 Act is an ornament, not an instrument – and so it is as much a mere constitutional decoration as any ermine robe, and is just as much use.

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Five glaring issues about the announcement of the ‘new national flagship’ prestige procurement

2nd June 2021

You may think that after that botched ferry contract that the government would steer clear from further Brext-related maritime procurements.

Then the chair of the public accounts committee said:

‘The Department for Transport waited until September 2018 to start thinking about the risks to freight transport across these important routes and entered into a £13.8m contract with Seaborne Freight despite it being a new operation, owning no ferries, and not having binding contracts to use the specified ports.

‘We will be pressing the Department for answers on how it awarded its three new ferry contracts, what it is doing to manage risks and exactly what it intends to do now it has axed the contract with Seaborne.’

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You would be wrong, for the government has now announced a new procurement exercise, the cost of which is reported to be currently set at £200 million – that is about fifteen times more expensive than those non-existent ferries.

It is a curiously worded announcement – and should be read carefully in full.

Here are five observations about what the announcement says – and does not say – about this prestige project – from my perspective as a former central government public procurement lawyer.

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There is no mention of the royalty in the announcement.

Given previous attempts at such a flagship have said that it would be a new ‘royal yacht’, this must be a deliberate omission.

One would not accidentally fail to mention that the new ship was to be a royal yacht and have royal blessing if such things were true.

Indeed, the glaring omission in the announcement indicates that the announcement is a negotiated document, where the wording has been subject to intense consideration and internal discussions and approvals.

And so, although the Crown is prevalent in the polity of the United Kingdom – from underpinning the executive, the legislature and the judiciary, royal charter bodies, the maintenance of the queen’s peace and the armed services – there appears to be one thing the royalty does not want to be connected with, and that is this ship.

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The second omission is that the announcement does not say – expressly – which government department will be responsible for procuring (and/or commissioning) and – as importantly – maintaining the ship.

The announcement hints that it may be the Ministry of Defence – and there is mention that ‘the ship will be crewed by the Royal Navy’.

And given that the MoD is the one government department with the experience and resources to procure and maintain such a ship then this would be its natural administrative berth.

But the announcement does not say – expressly – that it will be under the MoD, and the purpose of the vessel does not appear to be a military one.

And there is no particular reason why the MoD – with its own budget constraints – would want to be given the costs of procuring and maintaining a ship with no obvious military purpose or value.

If – and it is an ‘if’ – the ship is to be procured and maintained by another government department, but with an agreement with the MoD for the use of the Royal Navy for crewing the ship, then we have the prospect of Whitehall (ahem) surf-wars over which department will be responsible in the event of any problems.

And prestige procurement projects do tend to have problems.

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A third omission from the announcement is about which suppliers will be responsible for the whole-life maintenance of the ship.

The announcement states that a ‘tendering process for the design and construction of the ship will launch shortly’ – but there is no mention of any similar tender exercise for the upkeep and repairs to the ship over its expected thirty-year service.

Given that this ship is (intended to be) a bespoke construction, the question of ensuring that there are sufficient arrangements for its ongoing maintenance is just as important as the initial design and construction.

A plausible scenario is that a bespoke ship is designed and constructed but its service life is severely limited as no thought had been put into what happens next with such a bespoke construction.

Another plausible scenario is that the costs of maintenance and repair over thirty years come to be far higher than the costs of the initial design and construction.

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A fourth omission is any evidence that the practicalities of this procurement exercise have been thought-through.

For instance, there is no explanation as to why it would not be more cost-effective to refit or to purchase an existing off-the-wharf (ahem) ship and to convert that ship for the envisaged purpose.

Indeed, there is no mention of any business case at all for this specially designed and constructed flagship.

There is also no mention of the role, if any, of private finance – and if there is to be a private sector element, who will bear the risk of any commercial problems.

And this, of all projects, will be too big a project to sink.

There is also no mention of what would happen if (which is conceivable) it would be cost-effective for the ship to be designed by a United Kingdom company but (which is also conceivable) it would not be cost-effective for that ship to be constructed in the United Kingdom.

Could we have a repeat of the (for some) embarrassing ‘blue passports’ situation – where a tender for another prestige Brexit project was awarded to a foreign company?

Although the announcement waxes lyrically about the procurement in that the ‘intention is to build the ship in the UK … help drive a renaissance in the UK’s shipbuilding industry and showcase the best of British engineering around the world’ the government does not know – and cannot know – at this stage whether any value for money tender would result in the ship being constructed in the United Kingdom.

(And as this would seem to be a civil rather than a defence procurement, there are also potential issues about excluding external suppliers from this high-value tender exercise.)

The envisaged timings also seem rather ambitious.

Although carefully worded, this announcement is currently more of a press release than any serious public procurement proposal.

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Finally: £200 million pounds is, for this purpose, not that much – even if whole-life costs are excluded.

Indeed, one could imagine a considerable amount of such a budget being taken up by the to-and-fro of getting instructions and approvals for the design of this bespoke vessel.

Imagine: ‘the prime minister’s office thinks the wallpaper for the main conference room looks too cheap’ and so on.

And the recently reported ‘super-yacht’ of Amazon founder Jeff Bezos is estimated to be costing $500 million – which in sterling would be considerably more than the reported £200 million.

This new flagship may end up being the smallest ship in a harbour, with dot-com billionaires, oil-wealthy rulers and assorted oligarchs waving down at it from their super-duper yachts.

It may well be that to really impress the international business community, we are going to need a bigger boat.

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Prestige public procurement projects often fail – because they are commenced for non-commercial purposes and without thinking foreseeable risks through, and when those foreseeable problems do arise, too much political capital has been invested for the project to then be seen to fail.

The better way, of course, for the United Kingdom to ‘showcase’ here its post-Brexit seriousness about trade and business would be to have a sensible and realistic procurement exercise – including showing that the government is unafraid to pull a project if it does not make commercial sense.

A project that instead ‘showcases’ the commercial ineptitude of the United Kingdom will not help but will hinder our post-Brexit trading future.

But this sort of constructive criticism will be dismissed as doomstering and gloomstering and that voters do not want such negativity.

So those of us who want a more sensible and realistic approach from the United Kingdom to its post-Brexit future are going to need a bigger vote.

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