By Joshua.Chambers

19 Sep 2012

The marathon effort to put on the greatest show in the world almost hit the skids when security firm G4S failed to deliver on its promises. Joshua Chambers explores the lessons for contract management and major projects

As the Olympics opening ceremony drew near, it wasn’t just Republican presidential candidate Mitt Romney who was “concerned” about “just how well it will turn out” – as he said in a televised interview just before the Games. Security was on everyone’s mind, thanks in part to the confession by G4S – the main security contractor – that it wouldn’t be able to provide the 10,000 staff it had pledged to staff the venues.

The first costs of G4S’s failure fell on the jobseekers who’d completed its training course and were keen to play their part in the Olympics. “I figured it would be a great opportunity for me, because I would end up with training and security knowledge, and would work at the Olympics,” one G4S recruit tells CSW. He attended training sessions over a period of months, fitting them around his studies, only to be “left in the lurch”.

Even before he’d been due to start work on 9 July – three weeks before the opening ceremony – the training had been managed haphazardly; but when the time came for deployment, he says, “everything was thrown out of the window.” G4S never contacted him, nobody answered the phone at the firm’s call centre, and a visit to Locog (the London Organising Committee of the Olympic Games) revealed that G4S had never supplied his details for security-checking and accreditation. Having fully trained its recruit, G4S couldn’t accredit or deploy him – creating disappointment for all concerned.

That’s the story of just one person caught out – and uncompensated – in G4S’s failure. The other costs are yet to be tallied: the armed forces were deployed, as were police forces from across the country. But what went wrong, and what can the civil service learn from it?

The initial security tendering process concluded in December 2010, when G4S won the £86m contract to recruit 2,000 security staff for the Olympic venues. In 2011, G4S was asked to raise its staffing to 10,400 personnel, with the contract value increasing to £284m.

The Public Accounts Committee was critical of these arrangements, with committee chair Margaret Hodge warning in March 2012 that “Locog now needs more than twice the number of security guards it originally estimated... It is staggering that the original estimates were so wrong. Locog has had to renegotiate its contract with G4S for venue security from a weak negotiating position, and there is a big question mark over whether it secured a good deal for the taxpayer.”

Publicly, the issue then quietened down, but behind the scenes multiple reports warned of risks around security provision. Even before the Games began, says the Commons Home Affairs Committee’s chair Keith Vaz, there were “four reports into the problems of Olympic security: two from HMIC [Her Majesty’s Inspectorate of Constabulary], a Deloitte Report, and one from KPMG.” Vaz’s committee is now writing its own report, to be published imminently.

These four reports raised various concerns, with April’s Deloitte review warning that G4S’s management information was weak. An HMIC review in September said Locog’s security programme was behind schedule, and “may put aspects of security at the Games at risk”.

However, it was not until 3 July that G4S became worried that it would not meet the terms of its new contract. On 11 July, the company admitted at an Olympic Security Board meeting that it could not do so.

Asked why it was so late before G4S admitted its problems, its chief executive Nick Buckles told the Home Affairs Committee that “to get 10,000 people-plus on the ground in a relatively short period of time has been a huge logistical challenge. We did not know that the contract was not going to perform until very late on, purely because the whole process is very back-ended in terms of getting everybody ready for the games. We had filters in place all the way through from March onwards to see how well we were progressing in that recruitment drive, but the fact is that you have lots of different parts coming together at the last minute”.

In the event, the military stepped in to provide venue security, while the police took charge of venues outside of London. “The police are famously a can-do service, as are the armed forces. On this occasion, as in the past, they were able to step up at the last minute and fill the gap,” says Jon Collins, deputy director of think tank the Police Foundation. However, he warns that “it’s not cost-free”: there will be a very large bill for overtime and accommodation, and many people had leave cancelled.

G4S will pay the costs of this military and policing operation, although it still claims to be owed a £57m management fee. The wrangling looks set to continue for some time, but there are already lessons that can be learned about commissioning and contracting.

When G4S’s failure became obvious, home secretary Theresa May told the House of Commons that the recommendations made in the four security reports had been adopted, and that G4S had continually assured the government that it would meet its commitment. But Vaz says that “from the evidence we’ve received so far, civil servants are very trusting, and ministers seem to prefer to ask people from outside [to conduct work] rather than look at in-house expertise.” Rather than giving civil servants “the skills necessary, there’s been a tendency to think the grass is greener on the other side and get in some consultants.”

“From the evidence we’ve received so far, civil servants are very trusting” Keith Vaz

He adds that “because of what we’ve seen with G4S,” the committee will in future interview the Home Office permanent secretary twice a year, and publish key indicators on the department’s performance.

Tom Gash, programme director of public service reform at the Institute for Government, asks: “Was it right to go for a single provider for all of the security, given the risks involved? There was an option that [the work] could have been spread across multiple organisations so that if one didn’t get up to scratch, the others might have been able to make up that shortfall.”

However, asked by Vaz last week whether another supplier could have managed the job, Locog chief executive Paul Deighton responded that G4S “could have done this job. This was a very ‘doable’ job; they could and should have been able to do it, and they simply failed to manage this part of their business efficiently to do it.” G4S “were the obvious and best candidates to do it,” he added. “They’re the biggest security company in the world.”

The political discussion has raged around whether it was right to outsource the security contract in the first place. Gash thinks this debate “suited all parties”: Labour wanted to criticise outsourcing, while the government “was happy to say: ‘You’re right, G4S’s behaviour is unacceptable’.” But Lord Ian Blair, former Met police chief and now chairman of policing consultancy Bluelight Global Solutions, believes that the drive to outsource security work will continue. “I am sure that the failure of G4S at the London Olympics will affect confidence in relation to private sector involvement in policing, but not for long,” he says. “The financial realities are that the private sector can perform routine and repetitive tasks more economically than the public sector… always provided that the chief officers retain accountability for all services”.

A more constructive debate, then, might revolve around how best to manage such contractors. It seems clear that those assessing Olympic security requirements not only dramatically under-estimated the numbers required, but then waited too long before revising their figures. Left trying to procure an additional 8,000 security staff to a very tight deadline, public servants may been a little too eager to trust G4S’s assurances that it could radically raise its staff numbers; certainly, they didn’t keep a sufficiently close eye on its work as it moved to train, accredit and deploy its recruits. Direct inspections and access to internal G4S management data should have revealed the company’s weaknesses long before it confessed to them.

While some politicians and unions have used the tale of G4S to question the use of private contractors, it shouldn’t be forgotten that the Olympics build project was delivered by private companies – to widespread acclaim. The public sector clearly can handle contractors brilliantly; but while those who oversaw the Olympics’ construction and events management contractors stand on the winners podium, those who commissioned the private sector security operation are heading for an uncomfortable dressing down in the changing room.

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