Wednesday, November 22, 2017

FOI reveals Transport for London repeatedly renewed £2m consultancy contract over 7 years without getting rival bids

Transport for London has defended the repeated extension of a consultancy contract worth almost £2m over a seven year period without asking rivals to tender for the work.

In October 2010 the capital’s transport agency hired the contractor to provide a staff member who would “assist the TfL senior leadership team” during their work on the Horizon programme which was tasked to slash costs in TfL’s support functions. 

The initial contract was worth £122,980 and covered “targeted senior executive leadership facilitation, support and coaching for the TfL leadership team, including the Commissioner and the Chief Officers.”

TfL says the work was awarded following “a search of the market,” however the relationship has been extended several times over the following seven years, each time without alternative suppliers being asked to tender. 

Each of the renewals was approved following the production of a ‘single source request’ document which self-exempts public bodies from tendering contracts.

The first extension came in February 2011, just 4 months after the initial agreement was signed, with further extensions in August and October of the same year.

The document approving the second extension justifies the failure to openly tender the work on the grounds that other suppliers “would not have the existing knowledge of TfL, the Horizon programme, the expertise and familiarity or trusting relationship with the individual Directors in the Leadership team.”

In August 2012 an uncontested extension worth £250,000 was approved on the grounds that “a decision to put this activity out for tender would inevitably have postponed the delivery of Project Horizon”.

The document added that proceeding without the support of an external contractor “would have meant progressing Project Horizon without effectively organising or coordinating Chief Officer input, leading to a sub-optimal conclusion and/or delay to the project.”

Eleven months later TfL justified a decision not to put a further extension, worth £162,000, out to tender “as it may result in a loss of continuity in the development of individuals”.

The relevant approval document also states that the additional work being approved was “needed to provide the continuous support that is required by the Commissioner.”

An extension worth £175,500 was signed off in October 2014 to allow the contractor “to assist the Commissioner direct and develop an effective TfL leadership team and to support the team so that he can lead TfL effectively.”

It also justified the decision not to tender the work on the grounds that “it may result in a loss of continuity in the development of individuals”.

Further extensions followed July 2015, March 2016, October 2016, March 2017 and, most recently, in October 2017.

A freedom of information request shows that over the seven year period to October 2017 the contractor was paid £1.74m. The latest extension is worth a further £210,000.

The services provided span the terms of former TfL Commissioner Sir Peter Hendy and successor Mike Brown. TfL’s top post comes with a salary in excess of £300,000 and a host of in-house support staff. 

Defending the consultancy contract, a TfL spokesperson said the contractor in question “has provided advice and support to the TfL leadership team for a number of major organisational change programmes to deliver a range of improvements and significant financial savings.  

“The current programme is delivering £4bn of savings to 2021/22, reducing our operating costs for the first time in our history.”   

However Liberal Democrat London Assembly member Caroline Pidgeon said the agency’s decision to repeatedly roll over the contract uncontested “for so many years raises some fundamental questions about TfL’s transparency, let alone its commitment to value for money.” 

She added: “Contracts such as this should be open for examination and regularly put out to tender.”

The most recent renewals appear to undermine efforts by Mayor Sadiq Khan to slash costs within TfL in order to help fund his freeze fares and meet the challenges posed by the axing of TfL’s Government grants.

Last year Mr Khan ordered the agency to carry out “a fundamental review” of management layers, renegotiate all contracts, freeze recruitment “for all but the most essential roles” while “significantly cutting the most expensive of the existing circa 3,000 agency contractors.”

Commenting on the FOI’s revelations, Labour AM Tom Copley said: “We’ve had a commitment from the Mayor to reducing consultancy costs, TfL must now follow through. 

“At a time when TfL are having to tighten their purse strings because the government are removing their operational grant, it begs the question whether this is value for money.”

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