2.12 GCHQ is exempt from normal European Union procurement rules. Nevertheless, it followed a procurement process based on the European Union's Negotiated Procedure in line with best practice for PFI deals. GCHQ's external advisers, who had a great deal of experience of PFI projects, told us they believed GCHQ had made good use of them and had involved them well at this stage of the process.
2.13 GCHQ selected nine bidders to pre-qualify from the original 18 organisations that had expressed an interest. GCHQ and its advisers then considered whether the eight pre-qualification submissions were likely to meet the invitation to tender's requirements.
3 |
| The four bidders invited to tender |
The Figure shows the four consortia invited to bid in October 1997
Name of bidding consortia | Companies involved |
Turing | Aqumen Services, ICL, CIBC Wood Grundy, Scottish Hydro Electric |
Oakley Partnership | Amec, Symonds, EDS, Goldman Sachs |
Signal | Bovis Construction, Johnson Controls, Stanhope |
IAS (originally GSL) | Carillion (originally Tarmac Construction), Group 4, (later) British Telecommunications |
Source: GCHQ |
2.14 This selection process led to four bidders being short-listed for the invitation to tender stage in October 1997 (Figure 3). Three of the four short-listed bidders told us that they believed that GCHQ and its advisers had handled the bidder selection process well. One, however, believed that GCHQ had not been clear about its objectives.
2.15 GCHQ and its advisers undertook detailed analysis of the four short-listed bids in April 1998. The bids were divided into groups of key aspects such as building design, service provision, security etc. GCHQ was generally disappointed with the level of detail and maturity of the bidders' proposals. The proposals were evaluated against the Treasury's standard criteria and the specific criteria in the invitation to tender. GCHQ found that none of the bids fully met its requirements, for example on security. Also, widely differing assumptions of project scope were used by bidders in compiling their tender prices and they did not include a financial model in the format requested. GCHQ's economic evaluation summary is shown at Figure 4.
4 |
| The Results of the Economic Analysis of the four bids |
The Figure shows that IAS had the best overall ranking and that Oakley largely ranked second when price was given precedent over quality
Bidder | IAS | Turing | Signal | |
Bid | £328 m | £435 m | £485 m | £480 m |
Weighted Score/Price | 100.0 | 75.4 | 67.6 | 68.3 |
Weighted Score/Quality | 37.5 | 34.4 | 48.2 | 28.4 |
|
| Ranking |
| |
Price/Quality Ratio 90:10 | 1 | 2 | 3 | 4 |
Price/Quality Ratio 80:20 | 1 | 2 | 3 | 4 |
Price/Quality Ratio 70:30 | 1 | 2 | 3 | 4 |
Price/Quality Ratio 60:40 | 1 | 3 | 2 | 4 |
Price/Quality Ratio 50:50 | 1 | 3 | 2 | 4 |
Source: GCHQ |
2.16 The IAS bid had the best overall rating. Signal's bid, which favoured redevelopment of the Oakley site, was seen to be highly priced, of poor quality and overly complex compared to the other three. Turing's bid was seen to be the best on most criteria except cost.