Bidding Special 2

As discussed in an earlier post, In the Public Interest, we know the MoJ have been tinkering with the bidding process, basically because they were horrified at the piss-poor scores that some of the bids were getting, but particularly those of the big boys. By contrast and not surprisingly perhaps, I'm led to believe that the smaller players and those like the Mutuals who are very familiar with the work, scored pretty well on the initial submissions. 

Clearly this state of affairs is not politically acceptable, so the decision was made late in the day to basically fiddle the process, insert an extra stage, but pretend it was always there from the beginning. Cunning eh? By hook or by crook, the big boys have got to be 'helped' in the bidding process, or goodness gracious me, the whole TR pack of cards might come tumbling down. Now lawyers take note. Those bidders who did well at the beginning, scored high and passed the thresholds, just might feel a tad aggrieved to discover the competition is getting some nods and winks.  

This is what the bidders have been told and I'm grateful to a disgruntled one of their number for the info. I've left out a couple of particularly tedious paragraphs and by the way, ITN stands for Invitation to Negotiate:-     

Transforming Rehabilitation Programme

Instructions for Further Round of Discussions

1. Introduction
As notified to Bidders on 30th July 2014, the Authority has carried out the initial evaluation of Offers and is moving to a further phase of discussions with all Bidders. This phase is being introduced in accordance with paragraph 4.8 of Volume 1 of the ITN. This phase will apply for all Lots and to all Bidders who submitted Offers. It is designed to provide Bidders with feedback on indicative scores which are below a score of D (acceptable) and updates for some assumptions and data. Following discussions, Bidders will be invited to re-submit any parts of their Offers which they wish to amend (whether or not relating to areas on which they have received feedback). The original Offers submitted, as amended by any re-submitted elements, will constitute the Offers at this stage and will then be evaluated in accordance with the evaluation methodology set out in the ITN.

2. Meetings
Bidders will be invited to two meetings per Bidder to be held between 13th and 29th August 2014. While the Authority would wish to accommodate the timing preferences for Bidders, the Authority is unable to guarantee that preferred days will be available due to the availability of subject matter experts. Bidders are invited to notify the Authority by 11th August 2014 of any dates that they are not able to attend meetings.

After conclusion of the meetings, Bidders will then have five working days to submit their updated Offers. Offers must be submitted to the Bidder's drop box address by no later than 5pm on 5th September 2014. Bidders are requested to submit a File Submission Checklist by the 3rd September 2014 summarising the files that will be submitted on the 5th September 2014. Further instructions confirming the requirements for submission of files will be issued separately. 

3. Agendas
The Authority will issue an agenda in advance of each Bidder meeting. The focus of the first meeting will be on the most serious issues identified by the Authority. The focus of the second meeting will be an update and further discussion on the issues raised in the first meeting and any other issues. 

4. Feedback
Bidders will be provided with feedback on the most serious issues identified to date by the Authority with each Offer the Bidders submitted. Further details of the feedback and when it will be provided will follow. 

Bidders should note that, for practical reasons, Bidders will not be provided with all scores. Bidders should also note that any scores that are provided will be indicative at this stage as they do not fully reflect the extent to which the Bidder's Service Delivery Solution may impact on that indicative score. For example, where a Bidder has outlined a commitment in the question response that is not committed to in the Service Delivery Solution, the absence of commitment from the Service Delivery Solution is not yet reflected in the indicative score. This means that in the evaluation, scores may reduce (or increase) to reflect the Service Delivery Solution (in addition of any changes to evaluation to take account of re-submitted elements of the Offer). Further details regarding re-submission of the Service Delivery Solution are set out below.

Bidders will not be provided with feedback on their financial responses, other than in the context of Evaluation Criteria LCF03 AND LCF05.

No information regarding positioning of Offers (including relative positioning to other Offers) will be given to Bidders at this stage. Bidders should also note that the Authority has not at this stage undertaken the Price per Quality Point calculation set out in Section 8 of Volume 2 of the ITN and has not applied the award decision process set out in Section 9 of Volume 2 of the ITN.

5. Resubmission
6. Updated data and contract documentation

7. Updated timing
It remains the Authority's intention to award contracts before the end of 2014. To minimise any negotiation required at Preferred Bidder Stage, we are requiring Bidders to update their responses to reflect the updated assumption that share sale (i.e. the Completion Date referred to in the ITN) will take place on 1st February 2015 rather than 1st November 2014.

It is anticipated that this update will primarily affect the financial and Mobilisation Transition and Transformation (MTT) proposals. Updated instructions and templates will be shortly issued to Bidders that reflect these updated timing assumptions.

8. Service Delivery Solutions (SDS)
Bidders are invited to review their SDS to ensure that it complies with the requirements set out in the ITN. To support this review the Authority has developed a checklist of issues that Bidders should consider and update or amend their SDS to reflect. The checklist will be issued to Bidders separately.

Bidders should note note that as part of the evaluation at this stage, the content of the SDS will be considered in accordance with the ITN rules and therefore any contradiction of the question responses or caveats regarding the required contractual commitments will be taken into account. In particular, Bidders should be careful that nothing in their SDS contradicts or caveats their response to LCF 1 to the draft Amended and Restricted Services Agreement including in particular, but not limited to, Schedule 7. Any such caveats or failure to provide the minimum required commitments may result in a score of F or G, if it were to materially undermine the response to the questions.

9. ITN
The terms of the ITN apply to the further round of discussions and to the process for resubmitting Offers. 

Now the MoJ are fully aware that some cynics might smell a rat in all this, but being good and loyal civil servants, they've thought of that possibility and have prepared another cunning plan, a script for any possible awkward questions. So here's the spin:-

Question : Are you having another round of discussions with bidders because the bids you received have been so poor? 

Answer : Absolutely not. The first part of the competition has given us real confidence with the evaluation of bidder submissions demonstrating both quality and innovation across the market. The next round of discussions with bidders will provide them with the opportunity to refine their bids prior to selection of Preferred Bidders. 

Question : What impact does this have on the overall competition timescale? 

Answer : We have always said we intend to award contracts by the end of the year and that remains the case. 

Question : The probation service is in chaos and now you are announcing yet another delay. Doesn't this demonstrate that these untested reforms are being rushed through to a wholly unrealistic timetable? 

Answer : Attempts to paint a picture of chaos within NPS and CRCs are simply inaccurate and do not reflect the experience of most probation staff. We have always been clear that these thorough plans will be rolled out in a controlled way that ensures public safety at every stage and that is exactly what we are doing. There is no delay to the competition and these essential reforms remain on track. 

Question : What are you going to do to improve the quality of the bids you have received? 

Answer : The next stage of discussion is a sensible step that will allow us to clarify any outstanding points that need addressing with bidders, who will also have the opportunity to refine aspects of their bid. This is not unusual in any major procurement process and is simply good practice.  

Question : When are you going to announce your preferred bidders? 

Answer : We expect to announce preferred bidders by late autumn. 

Question : Does it now look like you will not be able to award contracts for every CRC and that some will remain in public ownership?  

Answer : The first part of the competition has given us real confidence with the evaluation of bidder submissions demonstrating both quality and innovation across the market. We have a strong mix of bidders from a diverse range of partnerships. Private firms, charities experienced in tackling issues affecting offenders and small and large businesses have joined together to compete for the work that will help turn offenders' lives around. We will only award contracts where we have received bids that represent value for money, and have been assessed as being of high quality. We remain on course to award contracts by the end of this year.

I can only assume the author has a well-developed sense of ironic humour, especially having regard to the MoJ's track record with other contracts. They may be deluded enough to think everything's just dandy over at Petty France, but the new man at the Major Projects Authority seems to think rather differently, as reported on Civil Service World. When I say reported, you'll have to take my word for it because the link now reads 'no access'. This could be for no other reason than the FT seems to get very upset at people copying its work. Anyway, I grabbed it:-  

Probation outsourcing under threat

The Ministry of Justice’s probation outsourcing programme may be halted when the ministry has finished examining contractors’ bids, the head of the Major Projects Authority, John Manzoni, has signalled.   

The Financial Times reported on Sunday, 10 August, that Manzoni had “disclosed that a decision about whether to proceed with an ‘ambitious’ plan to outsource some probation services to the private and voluntary sectors would not be taken until the end of the summer.” Sources at the centre of government confirmed to CSW that no decision on whether to go ahead will be made until the end of the bid assessment process.

Manzoni’s of the word “ambitious” emphasises the risks involved in the outsourcing – risks exacerbated by the compressed timetable. Antonia Romeo, the MoJ’s director general for criminal justice, acknowledged to CSW in April that there is “a timing issue, because the government’s policy is to roll it out by 2015, so we can really start feeling the effects in reductions to reoffending.” And very senior officials have previously told CSW that the scheme is one of the highest-risk programmes currently underway in government.

Tania Bassett, spokeswoman for Napo - the trade union and professional association representing over 8000 members working in probation and family courts - said: “It has been clear to us from the start that the secretary of state's timetable for this privatisation programme is dangerously rushed and even his own advisers stated in the leaked risk register last year that it was an aggressive timetable.

"There have been a number of potential bidders pulling out of the programme due to the high financial risks, in particular the probation mutuals and the third sector, leaving a monopoly of large private sector companies being the only ones able to take such a risk on these contracts.

"This is a deeply flawed privatisation programme that should be halted as a matter of urgency so that the whole Transforming Rehabilitation programme can be reviewed before vast sums of tax payers money is gambled away of expensive contracts that are not fit for purpose or able to deliver.”

We'd do well to note just how keen government is on helping the big boys, especially as the end of a Parliament signals lots of opportunities for exiting politicians of every hue to get their noses in the trough and make smooth transitions to the Board Room. One thinks of the odious former Home Secretary John Reid for instance. This from the Independent:- 

Serco says Government is ‘keen to help us’ get through rough patch

The Government is back on side with Serco, just a year after the emergence of the multi-million pound offender tagging scandal, the outsourcer’s new chief executive Rupert Soames claimed yesterday, adding that ministers were “very, very keen to help us get through this”.

The scandal-struck company sank to a £7.3m pre-tax loss for the first half of the year, after a £106.1m profit for the first six months of 2013, as Serco paid for a massive clean-up operation after overcharging its biggest customer, the taxpayer, by tens of millions of pounds by claiming it had electronically tagged criminals who were actually dead or still in prison.

“This is a company that’s been badly traumatised by the events of last year. My job is to try to steady the ship,” said Rupert Soames, who was bought in from Aggreko to run Serco following the scandal. Yesterday he also appointed Angus Cockburn, his finance boss at the power provider, who is currently interim chief executive at Aggreko, to become his finance director at Serco.

“I can’t decide whether it’s like the Blues Brothers reforming or the Odd Couple coming back together,” said Mr Soames, who said the first three months in the job had been “on the busy side of absolutely bloody hectic”. Serco received a six-month ban on new government contracts last summer and repaid £70m to the Government for over-charging for tagging criminals.

Mr Soames, who is Winston Churchill’s grandson, said although “a reputation is in the eye of the beholder, my sense is that as far as the Government is concerned, they are keen to see us rehabilitated. The decision my chairman [Alastair Lyons] took last year to ’fess up, go for the absolute maximum co-operation and start a programme of corporate renewal has been vindicated. When I’ve been going round various government departments, I find them very, very keen to help us get through this.”

Serco was now running some government contracts at a loss, he said, including a £14m operating loss in the first-half on work providing housing for asylum seekers. “It’s costing us a humongous amount of money to deliver these obligations to the Government, because we mis-priced them.” Asked if the Government bartered too hard, Mr Soames said: “We offered the prices on our own free will. Now we’ve got to man up and deliver what we said we would. With several of the contracts that we won over the last three years, it’s turned out they’ve cost a lot more to run. The taxpayer is getting a spectacular deal at the expense of the shareholders of Serco.”

Mr Soames has launched a review of Serco’s contracts and strategy which is due to report alongside the full-year results next March. The company, which has issued three profit warnings since last November, said yesterday it was still on track for annual operating profits of at least £170m, provided no further problems were uncovered. Mr Soames added: “My suspicion is that folk are not going to be hanging out the bunting yet but they are going to be quite pleased to see that after a stage where every Serco announcement was a downgrade, we’ve maintained guidance.” Serco shares rose 1.6p to 330.5p yesterday.

Finally, some recent thoughts on bidding:-

Our CEO has revealed that November is the likely time and that this is because bidders have had to either re-do or tinker with their delivery models. My thoughts are that if, after all the months of prompting about what is required, that you still need to be spoonfed in order to submit a satisfactory model, then you are not capable of running a CRC or playgroup for that matter.

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South Yorkshire CRC given a provisional date to sign contract with winning bidder for the 18th December and for that bidder to take over on the 1st February  

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That's a big change from October as originally stated, good luck if they think they can be up and running by Feb!!

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With the bollox that is going on now even December is a pipe dream.

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If the information is correct that will be a wonderful Christmas present for the bidders! The last turkey in the shop.....

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A little insight for potential bidders: if someone is low ROSH but high risk of re offending, the chances are that they will re offend. Change is a long process for many and not always measurable as a 'hard outcome'. It doesn't happen overnight. Probation staff understand this and have kept going, motivating, pushing and instilling hope. We understand that despite doing excellent work, people are complex and applying all the desistance theory in the world doesn't guarantee success. 

So bidders, buyer beware! If you thought ETE was an easy ride for profit (clearly not because all MOJ work is constrained by their lack of understanding) then think again....offender management is a minefield. Offenders are not quantifiable units on which you can predict profit and given that staff are so demoralised, the main resource available has already diminished...Elvis has left the building. Good luck bidders!

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This is why PBR is going out of the window and the contracts will be on a fee per client basis.

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A couple of other points are worth making in relation to this story. Firstly, although A4E clearly found it too much, delivering education in prisons is a relatively easy prospect. You don't have to develop the courses; the outcomes are very easy to define; and there are relatively few other factors to complicate delivery (although a Nasty Party-designed prison regime that prevents your clients from actually getting to your service is one of those). In addition, there's a huge wealth of alternative providers of education who could fill the gap. 

Contrast this with 'offender management', where the only 'simple' measure of success is massively dependent on other factors (not least of which being whether one of your key partners, the police, decide to change how they work and make decisions on whether or not to arrest someone), and where research shows that 'what works' with any one client is often very individualised. The Government's way around this is to get the people who actually know how to run this service to set the companies up, ready for the turkey Christmas sale - but of course this completely makes a mockery of the idea that the private sector is able to 'innovate' in this arena.

Secondly, the ongoing debacle that is A4E shows that the bigger a company is, the more concerned it will be about the reputational damage it may suffer, and the more it would be able to absorb the short-term financial cost of breaking its contract. This WILL happen with CRCs - the hassle won't be worth the money, and one or more of the big boys will walk away. If the Government were concerned about service delivery (as opposed to cost), they would be looking at smaller, more specialist providers who will be determined to deliver on the service because that's all they do. Such as mutuals made up of former Probation staff, for example. The very groups that are now picking their hats up out of the ring because the financial risk is too great to bear - plus they know how poisoned the TR chalice is.