1.3 In October 2012, the Department cancelled its provisional decision to award the InterCity West Coast franchise to First Group. It had discovered errors in the procurement process, including the bid evaluation tool and inconsistent information provided to bidders, while preparing to defend itself against legal proceedings from one of the bidders. The Department consequently paused three other franchise competitions: Essex Thameside, Great Western and Thameslink, Southern and Great Northern.
1.4 As we reported in 2012, the collapse of the competition resulted in significant additional costs to the taxpayer to compensate bidders for the costs they had incurred. It also damaged the Department's credibility with train operators. Appendix Three sets out the sequence of events since the competition was cancelled.
1.5 The Department has now largely addressed the recommendations in the reports by us, the Committee of Public Accounts, and Sam Laidlaw (then a Departmental non-executive director). The reports highlighted significant weaknesses in the way the Department had managed the franchise competition which, while not the direct cause of the collapse of the competition, were contributory factors (Appendix Three).