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.”