Poor contract management means two incumbent suppliers due to provide a radio network for emergency services will be in a very strong position when contracts come up for renewal, a Parliamentary watchdog has warned.
In a report the Public Accounts Committee (PAC) expressed doubts over the Home Office’s (HO) Emergency Services Network (ESN), a proposed new radio system to be used by police, fire and ambulance services that is not yet in use anywhere in the world.
Already the project is between five and 10 months behind schedule and the PAC believes it is unlikely that the ambitious 2019 target date for delivering the network will be met.
The report said: “The [Home Office] did not manage to maintain competitive pressure in letting either of the two main ESN contracts and when these contracts are recompeted the incumbent suppliers will be in a very strong position.”
While initially there was strong market interest in both the main ESN contracts these ended up being awarded in relatively non-competitive circumstances owing to the withdrawal of major suppliers from the bidding process.
In both contracts the HO narrowed the competition down to five bidders with two invited to submit a final offer.
“In both cases, one of the final two suppliers withdrew leaving the department exposed to a potentially uncompetitive single-supplier situation,” said the report.
The HO had assured the committee that in one case the supplier withdrawal came so late that the winning bid was effectively prepared under competitive pressure while for the other a “should-cost model” was developed to ensure it was competitively priced.
The committee urged the HO to review its tender arrangements “to ensure it does not rule out potential bidders too quickly, to avoid future single supplier situations”.
Ironically ESN was designed to allow the contracts to be recompeted easily and frequently, ensuring costs are kept low and enabling technology to be regularly updated, but these advantages could be lost because of poor contract management.
Major contractors EE and Motorola will derive an advantage from their early strong position in the market, the report suggested.
EE could benefit from rolling out its network across Great Britain and Motorola set the specification for ESN devices, possibly setting specifications to favour its own products.
The committee instructed the HO to work with Ofcom to make sure other network operators have enough information to make use of ESN infrastructure and ensure that specifications are standardised and do not favour any individual supplier.
It also warned that the despite the prospect of delay the HO had not budgeted or planned for an extended transition period.
Contracts for the current Airwave system expire in December 2019. If ESN is not functional by then Airwave contracts will need to be extended, which could cost taxpayers around £475m for a year’s delay.
A HO spokesperson said: “The new Emergency Services Network will give the dedicated professionals who work so hard protecting the public and saving lives the most advanced communications system of its kind.
“Police, fire and rescue and ambulance crews will be able to do their work more effectively with ESN and the new system will deliver significant savings for the taxpayer.”
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