Political imperatives may lead to G4S paying a high price for the London 2012 security fiasco
Congratulations to almost everyone on a brilliant Olympics. Delivering a first-class performance when the world – including a certain US presidential hopeful – is scrutinising every move you make means the same thing for athletes and suppliers alike: do well and the world will love you, do otherwise and you will find nowhere to hide.
And so it is with security specialist G4S. With the report of the House of Commons home affairs committee on the failure of G4S to deliver security services at the Games now in wide circulation a further round of damaging publicity has resulted in strenuous demands for substantial compensation being aired.
The report places the blame for failure to deliver the requisite services squarely on the shoulders of the supplier, and the detail paints an interesting picture of how not to behave when contracting with a large customer – or any customer for that matter.
A senior executive at G4S offered to pay the cost of bringing in the military to fill the gap left by its default. It was noble of G4S to offer that, but it remains to be seen whether these funds are forthcoming. There are now public demands that G4S should forgo its £57m management fee.
The substantial amount of Government business from which G4S benefits has led, inevitably, to the further demand for a blacklist of major companies that have failed to deliver.
The Government, for its part, has made clear that it wishes to ensure the experience of each department is shared with others to reduce the risk of awarding contracts to unworthy suppliers.
Turning first to the question of compensation the committee’s report indicates that the G4S contract with Locog set a price to be paid for failure.
There is a serious question as to whether Locog’s right not to be put in the position it was will produce the significant sums most people are likely to see as appropriate.
For one thing, there is not necessarily an immediate claim for payment of the salaries of the members of the military. After all, they were already being paid by the MoD so can a case really be made for the total of their salaries to be paid by G4S?
‘Blacklisting’, of course, is an excellent term with which to capture the failed status of a supplier as well as the imagination of the public and others baying for blood. The Government has been careful to call its programme to create a widely available record something completely different.
And who could blame it? With the level of objectivity, transparency and fairness required in public procurement, scrupulous adherence to the rules is paramount. Nevertheless, the opportunity exists to share and apply experiences across government and this should be encouraged.
Where does that leave us? The committee report calls for a quick settlement. Time will tell whether PR interests will trump legalities and lead to the payment of substantial sums before public and political interest fades. Or would it better simply to slow the negotiations and hope the world forgets?