Grayling defends DfT's 'accelerated competitive process' for Brexit no-deal ferry contracts

Written by Beckie Smith on 8 January 2019 in News
News

The transport secretary defended the department's decision to award a £13.8m contract to a company that owns no ferries.

Brittany Ferries – which does own ships – was awarded a £46.6m contract. Photo: PA

The transport secretary, Chris Grayling, has defended the way his department awarded contracts to ferry operators to move goods in the event of a no-deal Brexit, following a furore over a contract awarded to a company that owns no ferries.

In a written statement to parliament yesterday, Grayling said the Department for Transport had carried out an “accelerated competitive process” to award contracts to three firms

The department has come under fire for awarding a £13.8m contract to Seaborne Freight, a new operator that owns no ships, to run ferries out of Ramsgate port in Kent after Brexit.


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The contract was one of three awarded to ferry operators to move goods such as medical supplies across the English Channel in case transport is disrupted if the UK leaves the EU without a withdrawal agreement. Brittany Ferries and DFDS – which both own their own vessels – received contracts worth £46.6m and £42.6m respectively.

Grayling told the House of Commons that DfT had carried out an “accelerated competitive process… to ensure that capacity can be in place in time for a no deal exit whilst at the same time securing value for money for the taxpayer”.

“The department approached a number of shipping providers capable of providing additional freight capacity in order to ensure fairness for the market and also engaged external expertise to ensure value for money for the taxpayer,” he said.

He confirmed the contracts had been awarded via a negotiated procurement procedure without prior publication. Regulation 32 of The Public Contracts Regulations 2015 allows public contracts to be awarded without an open procurement process under specific circumstances – for example, if a previous procurement round has failed to attract suitable bids.

Grayling also defended the decision to award one of the contracts to Seaborne, despite the fact that it has no track record of running ferry routes.

He said the firm’s management team had “experience in the shipping and maritime sector, including the operation of ferry services on cross-channel routes, freight brokerage, port management and vessel chartering”.

“As with many operators in the sector, it is not uncommon that they do not own their own vessels and will be chartering them through third parties. The department has reviewed their plans for sourcing vessels with the support of external advisers,” he said.

And he said Seaborne’s contract set out that the company would only receive payment in arrears and on the condition that it provided services successfully. “The Seaborne contract is also subject to the achievement of a range of key milestones including in relation to finalising funding and vessel chartering agreements,” he added.

“No apologies”

Paul Messenger, the Conservative councillor for Ramsgate, was among those who publicly criticised the decision to award the Seaborne contract, saying he did not believe the new shipping routes would be ready for a no-deal Brexit by 29 March.

He questioned how it was possible to carry out due diligence on a company with no ships and no trading history, telling the BBC: “Why choose a company that never moved a single truck in their entire history and give them £14m? I don’t understand the logic of that.”

But appearing on the Today programme last week, Grayling said he would made “no apologies for supporting a new British business”. “This has been looked at very carefully by a team of civil servants who have done due diligence on the company and have reached a view they can deliver,” he said.

The row over the Seaborne contract was worsened when it emerged that the firm’s terms and conditions included instructions on ordering food, leading to accusations it had copied them from a takeaway website. The page told customers to read the T&Cs before ordering “any meal” and added: "You must always provide a valid contact number and email when ordering online.”

A spokesperson for the department said at the time that the government had carried out the correct due diligence on the firm before awarding the contract.

“Before any contract was signed, due diligence on Seaborne Freight was carried out both by senior officials at the Department for Transport, and highly reputable independent third party organisations with significant experience and expertise into Seaborne’s financial, technical and legal underpinning,” they said.

“This section of the terms and conditions on the company’s website was put up in error. This is being immediately rectified.”

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Beckie Smith
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Beckie Smith is a reporter for CSW who tweets Beckie__Smith.

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