1.14 The facilities management services in the Arteos bid were to be provided by Josef Klüh, a German company with offices in Berlin, although the bid also made clear that some of these services were to be subcontracted to an unnamed strategic alliance partner. This subcontractor was the German subsidiary of Johnson Controls, a large American-based facilities management provider. The individual representing Klüh in the Arteos bid was on secondment from Johnson Controls.
1.15 The facilities management element of the rival Embassy Partnerships bid was also to be provided directly by the same German subsidiary of Johnson Controls. Bilfinger + Berger have told us that they were not aware that Johnson Controls were involved in another bidding group. In January 1998, several months after the appointment of Arteos as preferred bidder, Johnson Controls with the FCO's approval assumed full responsibility for the provision of the winning consortium's facilities management services in place of Klüh, who had withdrawn.
1.16 Johnson Controls told us that, although the German subsidiary would have provided the services in either case, the two bids were handled by separate business units: an English subsidiary in the case of the Embassy Partnerships bid, and a German subsidiary in the case of the Arteos bid. As a result, Johnson Controls corporately was not aware that the company had participated in two bids until January 1998 when the German subsidiary became an official partner in the Arteos bid, and reported this fact to Johnson Controls' International management.
1.17 The FCO had taken steps to establish whether conflicts of interest existed by asking each bidder to provide full details of the legal entity making the bid including the building contractor and the facilities manager, but this did not reveal that Johnson Controls were a subcontractor in the Arteos bid. The FCO did not know of Johnson Controls's involvement in the Arteos bid until well after the appointment of the preferred bidder but there is no evidence that it in any way weakened the competition.