TfL procurement ‘still a concern’ following Silverton Tunnel and Garden Bridge fallouts

In particular, the GLA’s oversight committee assessment raises concerns in relation to the procurement of the Silvertown Tunnel, Crossrail’s Bond Street station and the failed Garden Bridge proposal. The GLA also investigated procurement of the Royal Albert Docks, Silvertown Quays and East Bank as part of its GLA Procurement review.

While accepting that TfL has put measures in place to improve its procurement models, the GLA Oversight Committee assessment concludes that “some concerns still remain and these will need to be investigated and processes improved and tightened”.

Consequently, the committee has tabled 12 recommendations to TfL (full list below). They include:

• TfL should formally review the procurement and delivery of Bond Street Crossrail station and the impacts on the delivery of the railway, to ensure the lessons are learned for future major projects
• On Silvertown Tunnel, TfL needs to ensure that its whole evaluation process is robust and transparent to prevent any future legal challenges
• When there are a small number of bids for a project, TfL should use an independent expert to estimate the costs for the delivery of the project, to ensure value for money
• The Mayor should review the lack of success of the Royal Albert Docks development to date and his ambitions, to ensure they remain realistic and deliverable
• The Mayor should ensure that demonstrable progress is made on the Silvertown Quays development during 2022

While calling for a review of Bond Street station procurement, the review does praise TfL for terminating its contract with Costain Skanska JV. The GLA committee report reveals that ending main contractor involvement early saved around £95M and dubbed it a “success story”.

On Silvertown Tunnel, the GLA assessment points to the legal challenge by a losing bidder as evidence that “specifications and evaluation processes need to be robust”.

TfL paid STC (comprising Hochtieff, Dragados and Iridium Concesiones de Infraestructuras) an out of court settlement in relation to Silvertown Tunnel in March 2021. As previously reported by NCE, the settlement is believed to be in the region of £10M.

The settlement came after two years of legal wrangling, which began after TfL named the Riverlinx consortium (consisting of Ferrovial subsidiary Cintra, Bam PPP PGGM, Macquarie Capital and SK E&C) as preferred bidder for the Silvertown Tunnel contract in May 2019.

In its court submission, STC slammed the procurement process as being “flawed, in breach of the principals of equal treatment […] and manifestly erroneous”. It also accused TfL of flouting its principals of “transparency” and “non-discrimination”. STC claimed that it “should have been the winning bidder” on the grounds that it “scored significantly better than Riverlinx on price”.

It also claimed that TfL “failed to treat STC fairly, transparently or equally” which led to “manifestly erroneous” scoring in relation to commercial aspects of the contract.

During the case, TfL hit back at these claims in its defence, with a spokesperson adding that the transport operator was “disappointed” that the legal challenge had been brought.

The GLA report adds: “In this case TfL may have been confident that it had acted correctly, but needed to consider the likely outcomes of a legal case. The legal advice provided to senior TfL officers resulted in a decision not to defend the legal action.

“The decision was based on professional legal advice on the merits of the case, as opposed to TfL’s own view of what was right.”

It adds: “It is clear from this case that the specifications and evaluation processes need to be robust. In large procurements, bidders will spend millions of pounds entering a bid.

“There is then a very low bar in terms of the cost of entering legal challenges. The correct outcomes need to be shown to have arisen from an appropriately designed evaluation process that has been accurately followed.”

Former chair of the GLA Oversight Committee Caroline Pidgeon added: “Over the years, the London Assembly has reviewed a number of large procurement processes. This investigation continued in that vein and explored a number of procurements that have given this Committee reason to be concerned.

“It’s claimed that the GLA Group’s vast buying power should help create a fairer, greener and more equitable city – but we discovered that procurement arrangements were not being followed in all cases. This led to a significant amount of single-source tender arrangements, which may not have provided value for money.

“The scale of the expenditure makes this an area that is vital to get right, in order to deliver value for money for Londoners.”

TfL chief procurement officer Jonathan Patrick said: “We welcome the London Assembly’s report into procurement across the GLA and will review and respond to the recommendations in due course. We regularly review our robust procurement procedures and assurance processes to ensure that we can learn from previous procurements and further ensure value for money as well as our commitment to transparency.”

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