Wednesday, 3 October 2012

Bravo Richard!

There is one thing I really admire about Sir Richard Branson it is his determination.  He was determined the West Coast Main Line (WCML) bid evaluation was wrong so he publically pursued it and with it, publically embarrassed the very people who would be awarding him a £6bn contract.  Madness you may say?  The golden rule of sales is don’t upset the customer.  I think it’s brilliant to stand up and say no, this isn’t right.

Where does this leave the DfT?  They will have to re-run the WCML bid and endure extra scrutiny from bidders, government and the public on future franchises.  It may change the entire procurement method for rail operators.

Why has this happened?  Branson said FirstGroup’s “numbers didn’t add up”.  The DfT have said “there are mistakes in the way the process has been managed”.  This can mean two things – the financial evaluation was very complicated and it could lead to judgements being made about a price that affect the financial scoring but are not based on the price. 

I too have been involved in complex tenders where you look at the evaluation model and think it could be read in different ways or you find formulae errors.  Did I or the other bidders challenge? No.  It rarely happens. Why?  The golden rule – don’t upset the customer.  You just dust yourself off and go on to the next one.

Bravo Richard.  But has he won a battle only to lose a war?

Only time will tell if Branson’s decision will help or hinder Virgin/Stagecoach in future franchises.  Stagecoach has more to lose in this market – they have 2 existing franchises and are actively pursuing others – Virgin don’t and aren’t.

My advice to organisations running tender processes is to keep the financial evaluation simple, clear and concise.  Don’t over complicate it.  This will help your bidders know where they stand and leave you and them in no doubt who the winner is.

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