3.5 By June 2000 the Agency had received Best and Final Offers from three bidders. Significant differences between bids, however, triggered concerns about the Capita bid on which further assurance was sought. These concerns related to:
Timescale
■ One bidder E-Cres advised the Passport and Records Agency that in their opinion it was not possible to fully achieve the twelve month timescale, as in its view fifteen months appeared more realistic (E.Cres was not penalised for this position);
Price
■ Two bidders (PricewaterhouseCoopers and Capita) offered similar technical and operational solutions. The Capita bid was, however, cheaper. The price differential was partly due to shorter processing times being assumed for the telephone application route (as suggested by the Agency's assumptions) and higher levels of demand. PricewaterhouseCoopers had also included an additional identity verification process. Capita was subsequently asked to adopt this approach. The PricewaterhouseCoopers bid team who now are part of IBM, told us that the Agency did not clarify assumptions underpinning their bid with them or ask for alternative prices based on different assumptions.
Application channels
■ PricewaterhouseCoopers and Capita also made different assumptions about the application channel customers would prefer. PricewaterhouseCooper's bid was based on 40 per cent of applicants using a paper channel (reducing over time) whereas Capita assumed that 85 per cent of applicants would use the call centre from the beginning, in line with the Agency's original assumptions.
3.6 The Agency asked PA Consulting Group to evaluate Capita's bid to identify why it was so much cheaper than the others, including looking at the issues set out above. Assurances were sought from Capita that their timescale was achievable, their assumptions were realistic, and Capita's internal business plan was examined. On the basis of assurances from their consultants and Capita, and on the basis that there was little difference between the technical evaluation scores for Capita and PricewaterhouseCoopers, the Agency awarded the contract to Capita.
3.7 The Office of Government Commerce Gateway scheme was not in place when the project began but an internal Home Office and consultants health check review was conducted in December 2000 chaired by the then Permanent Secretary. The Office of Government Commerce conducted Gateway 4 and 4A Reviews in July 2001 and February 2002 which made recommendations for improving programme management arrangements which were addressed by the Bureau. The Agency also made a determined effort to take on board lessons learned from the 1999 passport crisis (see Appendix 2).