Q71 Mr Field: Let me put it another way. I think lots of my constituents, who have to pay these bills, when nobody is sacked, when the sums escalate in this fashion, when they would have got sacked for tiny sums compared with this, would have thought that was a fair one. What action is the Home Office going to take to ensure that our constituents are not going to pay more, and what redress will our constituents have if you get it wrong again?
Mr Lewis: Can I try and address a number of elements of that? First of all, your constituents and you as their representative are entirely entitled to look at matters in that way. Equally, it is the case that, as far as one can tell at this distance in time, the decisions that were taken at that point in relation to the letting of that contract were not only proper, they were the only rational decisions that those who were at that point taking them could on the facts available to them have taken. Secondly, we do not know what would have happened had one of the other bids been accepted. What we do know is there was a fundamental difference introduced in the Channel mix strategy.
Q72 Mr Field: There has been this mega dipping into our constituents' pockets and nobody has lost their job. If the contract becomes £600, £700, £800 million in this timespan would anyone lose their job?
Mr Lewis: What we have just done is to renegotiate the contract with Capita and that has led to a reduction in its total estimated price over the lifetime of the contract with more rigorous clauses in terms of performance and in terms of the costing of the contract.
Q73 Mr Field: So what would it have been if you had not done those re-negotiations?
Mr Lewis: It would be more expensive.
Q74 Mr Field: We know that. What were they asking for that you managed to bring them down from?
Mr Lewis: It was not a question of what they were asking for. What we needed to do was to take account of the changes that had been introduced since the original contract.
Q75 Mr Field: But you were suggesting the price had been reduced. We know it is now £400 million. What was it going to be if you had not intervened so decisively?
Mr Lewis: We reduced the unit price, starting in October of this year, by just under £1 for each disclosure. So if you understand that there are something like 2.5 million disclosures per year than the mathematics can simply be worked out. Can I answer one part of your question which I have so far failed to answer and that is that if we were to find over the remainder of this contract that public servants-and I have spent 30 years in the public service and I believe profoundly in the ethics of the public service-had negligently abused the trust that the public put in them for spending public money then I would indeed expect them to pay for that penalty with their jobs.
Mr Field: Could we have a note on what the sum would have been without these negotiations?
Q76 Chairman: Can you help us with that?
Mr Lewis: We will attempt to provide that for you.2
Q77 Mr Jenkins: Mr Lewis, were you pleased with this Report when you read it or disappointed with it?
Mr Lewis: I think it is a fair Report. There is nothing in the Report with which I would want to take issue or quarrel. I think the Report does two things: the Report illustrates the problems that the Bureau ran into and it sets out very fairly why those came about, some of the steps that were taken and some of the steps that were not taken. It also illustrates what we concentrated on very understandably thus far on the steps that led up to the contract and the problems but it also sets out equally the very considerable success that the Bureau has had in the period since those problems occurred in not only righting them but now providing a more effective service.
Q78 Mr Jenkins: That is funny because this Committee get this Report through the post, we do not come together to discuss the Report, we do it as individuals and we have all had our attention drawn in the Report to the way that the contract was allocated. I will not repeat the questions that other members have asked but I had concerns when I read this Report. I am surprised you did not say, "yes, there were things which concerned me, particularly about the allocation". On 3.5 at the end it says one of the bidders, now part of the IBM Group said, "the Agency did not clarify assumptions underpinning their bid with them or ask for alternative prices based on different assumptions". Why is it that if you have people coming in with three different bids, with different sets of assumptions, when some match the criteria you have set out, others have raised problems regarding the time scale and the assumptions, why did you not go back and negotiate with each one what the price would be if they were on the same set of assumptions?
Mr Lewis: I think the difficulty that those who were responsible for the contract negotiations at that stage had was that we had reached the stage of best and final offers, and as is suggested by that best and final offer means precisely that. That is the point at which it is necessary to reach a judgment as to which contract, which bid is putting forward the best overall response to the contract.
Q79 Mr Jenkins: You made your mind up that Capita was the way to go.
Mr Lewis: We had not. That was the point at which-just to repeat, I am sorry if I am in danger of taking the patience of the Committee too far-not only was all of the normal due diligence and very exhaustive examination of those best and final offers taken forward it was also the point at which there was a special one-off examination of the Capita bid to identify whether there were any obvious reasons why it should be rejected notwithstanding the fact it was very substantially achievable.
Q80 Mr Jenkins: Why did you not go back to the second or third bidder and say if, "If I reset the criteria based on this assumption what price would you come in at?" It is now deemed to be a non-goer as far as you are concerned.
Mr Lewis: For two reasons, firstly the bid from Capita was what is known as a compliant bid, in other words it met the request for the service. Secondly, having reached the best and final offer stage it is not within the normal accepted rules of contracting that we can go back to the contractors again at that point.
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