Root causes
Following criticism of the Scottish Government in the recent Audit Scotland report on the new vessels for the Clyde and Hebrides, Finance Secretary Kate Forbes, speaking on Radio Scotland, said “the Audit Scotland report says there were no material issues with the procurement process” and the “root cause” of the problems lies with construction. The First Minister, along with other ministers, has followed this line.
The first statement is wrong and the second is questionable. Paragraph 8 on page 10 of the Audit Scotland report states its review starts from the appointment of Ferguson Marine Engineering Limited (FMEL) as preferred bidder and that it “did not audit aspects of the procurement process before this point”. In paragraph 5, it refers to “serious failures in vessel procurement” previously identified in the December 2020 report by the Scottish Parliament's Rural Economy and Connectivity Committee.
Evidence relating to the procurement process was given to the Rural Economy and Connectivity Committee. A 50:50 quality/price ratio was adopted to assess the bids. On price, FMEL was the most expensive. The highest evaluation score is awarded to the lowest cost bid, with the scores ranging from 84.8 to FMEL’S 72.9. But this cost disadvantage to FMEL was more than overcome in the quality assessment, in which FMEL was awarded the highest score of 76.0, far ahead of the second highest quality score, which was 56.5. Combining the two elements, FMEL achieved the highest overall evaluation score and was awarded the contract.
The criteria used in the quality assessment do not appear to have been published. It would be very interesting to know what they were and the reasons why FMEL was scored so much more highly than the bids from the five other shipyards, which are located in England, Germany, Poland and Turkey. It is difficult to avoid the conclusion that the criteria adopted for the quality evaluation aligned with the SNP administration’s political objective of favouring the Port Glasgow yard.
An effective procurement process would have included as assessment of the ability of the yard to deliver the vessels as one of the quality criteria. A rigorous assessment at this stage would have identified the weaknesses (which became all too apparent soon after construction started) and would have marked down the score on that basis. On this basis, the root cause of the delays and cost over-runs can be traced back to a flawed procurement process. GEORGE RENNIE
Inverness