Streamline challenges government over North Boats contract

Streamline Shipping Group is seeking damages from the Scottish government over its failed bid to operate the North Boats contract.

The fight at the Court of Session comes as the freight company, which bid unsuccessfully to take over the NorthLink boats, has criticised the government’s tendering process.

Development director, Gareth Crichton, insists the government breached procurement regulations when it sought tenders for the North Boats deal.

Streamline competed against Serco to run the NorthLink ferries. The contract was controversially awarded to the multinational organisation – despite criticism that they had virtually no experience of running ferries.

The contract award came despite a legal challenge from Streamline which resulted in the deal being temporarily suspended.

The suspension was lifted after a motion was lodged by the Scottish government.

Now, Mr Crichton says Streamline is entitled to be compensated for the expense it incurred during the tendering process. He is heavily critical of how the government came to award the contract for the North Boats to Serco.

A date is due to be set at the Court of Session for a hearing on the case.

“We still firmly believe there was a breach in the procurement regulation – that the dialogue process and the specification of service that the government was seeking to contract for failed to meet the required standards and that there are a number of irregularities in the process,” Mr Crichton said.

“At the very least we want our money back. We invested a vast amount of time and energy in bidding for that contract.

“The bottom line is that what has, in our view, separated the bids in terms of their cost can come back to a failure of the specification.

“It’s pretty clear that nobody in Orkney or Shetland knew what was being asked for. Three different bidders brought forward three different solutions, which kind of tells you there wasn’t a great deal of clarity in what was required.”

The case came to light in the Court of Session last Thursday, where a number of “preliminary issues” were discussed.

The Scottish government brought forward technical issues surrounding correspondence submitted prior to litigation – although Mr Crichton was confident they can be dealt with swiftly before a hearing is held.

“The Scottish government brought forward a couple of technical points regarding our pre-litigation correspondence. I’m not saying that those are frivolous, but I think they will be dealt with fairly quickly and then we will get into the substance of the challenge,” he said.

“We are certainly of the view that the service requirement wasn’t properly specified and, as a consequence of that, our bid was different from that which it might otherwise have been.

“We know that we had two ro-ro vessels in year-round, and we’ve all now seen that Serco don’t. They’ve got one that’s tied up for six months of the year. There are many occasions when Streamline traffic doesn’t travel on the day we want it to travel because there is only one freighter running to capacity. “Under the procurement regulations, when it [the contract] is challenged … there’s an automatic suspension on the award.

“We challenged and we submitted our case, and the Scottish government was petitioning the court to lift the suspension. “Lord Malcolm took the view that, in the balance of public interests, it was better to award the contract. The recourse that’s available to us is damages or, indeed, to have the contract set aside if it’s considered serious enough.

“I think from our point of view it’s a damages claim that we’re pursuing.”

Isles MSP Tavish Scott said the drawback to the Scottish government’s awarding the tender to Serco were now clear for one and all to see.

“Not only did they utterly fail to consult over changes to crucial fare packages, including the abolition of the group islander discount and the discount rate for pensioners, students and people with disabilities, but commercial concerns have now emerged and have been taken forward by Streamline in court.”

A government source said: “Transport Scotland will continue to robustly defend our actions in the award of this contract as we did last year before Lord Malcolm.

“Specific consultation on fares and services, among other things, was carried out with key local authority officials, and regional transport partnerships, and comments received were fully taken into account while the contract was being specified.

“In addition to this specific consultation, in 2010 the Scottish government carried out a wider public consultation on the Northern Isles tender exercise.

“Almost 400 responses were received and all views were considered in specifying the services.”


Add Your Comment
  • Stewart Mac

    • June 18th, 2013 15:22

    Initially when streamline challenged what appeared to be another of the Scottish Governments fundamentally flawed tender processes i was 100% behind streamline. To me it seemed that, for whatever reason, the Scottish Government had decided who was to get the contract and changed the rules to suit.

    It seems the Streamline challenge ultimately failed and i’m sorry to say that this latest action strikes me as being the wrong way to go. It comes across as sour grapes rather than fighting injustice which i am sure is not how streamline want to come across. It will undoubtedly preclude them from being successful in future tendering exercises. Bite the hand that feeds them?

  • Gordon Laurenson

    • June 18th, 2013 19:06

    WHO were the key local authority officials who were consulted, can we have their names?

  • Mathew Charles

    • June 18th, 2013 22:06

    Given the incumbent supplier was not taken forward as it did not submit a compliant bid I would argue Streamline have a strong case and David Macbrayne probably had an even stronger case?
    Given the fiasco of this procurement and the similar mess in Gourock – Dunoon one ought to ask who is the less than competent person/people managing these large procurement contracts?

  • Jerry McIver

    • June 19th, 2013 17:58

    Controversially, Serco had no experience of running ferries.
    Sorry, I must have missed the wealth of experience that Streamline would brought to the contract. Give me Serco over Streamline any day.
    Could it be that Streamline’s inexperience in these large scale tenders meant they misunderstood the requirement and submitted a bid that scored fewer points in the evaluation than it needed to win? To now say their answer was right and the question was wrong suggests they answered a question that wasn’t being asked.

    If there was local consultation into the specification it would be fascinating to know who the representatives were and what requirements they demanded and how they formed their position on what the requirement should be for passenger and freight users.
    Either the MSP wasn’t deemed important enough to be asked, or didn’t bother himself to ensure he was involved in making representations into the process or is now being a bit economical with his memory of events.

    Whatever the answers to these questions, pouring millions of pounds in compensation of taxpayers money into the pockets of private sector operator Streamline for doing precisely nothing doesn’t sound like a good solution to me.

    • Barry Gladstone

      • July 7th, 2015 14:35

      Serco has slightly more marine experience than Streamline – there are apparently more vessels registered to Serco at Lloyds under the UK flag than to any other organisation. Serco Marine Services is an auxiliary maritime service provided by Serco Group to Her Majesty’s Naval Service (incl. Royal Navy, Royal Marines) and the Royal Fleet Auxiliary. Serco Marine Services primarily operates from the nation’s three main naval bases, HMNB Portsmouth, HMNB Devonport and HMNB Clyde, but also supports training and operations overseas, as well as at various British Overseas Territories. As of 2014, there were over 130 vessels operated by Serco Marine Services. The service operates a large assortment of auxiliaries including tugs and pilot boats as well as transporting stores, liquid and munitions and providing passenger transfer services (i.e. ferries!) to and from ships.


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