No fraud in procurement of controversial CalMac ferries, claims lawyer

A review by a senior lawyer into the procurement of the delayed Ferguson Marine ferries found no evidence of fraud, though parts of the process were “not entirely satisfactory”.

It comes after a BBC Disclosure documentary last year alleged the process for awarding the contract may have been rigged in favour of the Port Glasgow shipyard.

The documentary claimed Ferguson Marine had been given sight of a document detailing the design specifications by a consultant, some of which was copied into the yard’s bid, while competitors had to submit a bid with the aid of a less detailed dossier.

The broadcaster stands by its journalism and said the review failed to tackle the core allegations in the film.

Following the documentary, the ferry infrastructure agency CMAL (Caledonian Maritime Assets Ltd) instructed Barry Smith KC to investigate the award of the contract.

His report was published in full on Wednesday; much of it focussed on the period in 2014 and 2015 before the contact was awarded.

His conclusions said: “Ultimately, the question posed was whether a fraud was committed during the procurement process. I did not find evidence of fraud.

“That is not the same as saying that the procurement process was conducted perfectly.”

Mr Smith’s investigation did not specifically look into whether procurement rules had been breached, instead it considered whether fraud had taken place.

In his report, he said he had met with the journalist behind the programme in July this year.

He received an email from the journalist stating: “We are concerned that your remit has been drawn so narrowly that it will exclude examination of the important allegations the BBC made.”

Mr Smith’s report said he doubted whether Ferguson Marine Engineering Ltd (FMEL)’s possession of a document called the statement of technical requirements (SOTR) gave it an advantage.

He said: “It is superficially attractive to conclude that FMEL gained an advantage in the procurement process by having possession of the SOTR but closer analysis of the process seems to me to cast doubt on that conclusion.”

Mr Smith said it was a “poor quality document” and noted “somewhat bizarrely, when assessed by CalMac against the SOTR, the FMEL bid ranked second”.

He said he could not draw any conclusions around the allegation that FMEL was allowed to effectively submit a new bid, saying “this aspect of the procurement process is not entirely satisfactory”.

However, he found “no evidence of any fraudulent intent on the part of any CMAL employee”.

Kevin Hobbs, chief executive of CMAL, said: “We welcome the findings of Barry Smith KC‘s independent investigation, which has established no evidence of fraud in the procurement of vessels 801 and 802.

“We do, however, recognise that the report identifies a number of missteps over the course of the procurement during 2014 and 2015, and mitigations have been in place for several years to ensure these do not happen again.

“For example, all parties involved in a CMAL competitive tender are required to sign a confidentiality agreement, and all clarification meetings with bidders are now carried out using the same method of communication.”

He added: “The KC’s report recognises the CMAL team at the time of this procurement as diligent, dedicated, hardworking individuals — which we stand by entirely.

“This is also true of the current team, who are firmly focussed on the delivery of these vessels, working closely with Fergusons to ensure they enter service as soon as possible.”

The Glen Sannox and the newly-named Glen Rosa are due to be delivered five years later than planned and costing more than three times the initial £97 million price tag.

A spokesman for the BBC said: “The BBC declined to take part in this review after it became clear Mr Smith’s terms of reference, which had been agreed by CMAL, explicitly excluded the central allegations made in our film.

“Those allegations questioned whether the ferries contract was awarded fairly and within procurement rules.

“We note that Mr Smith, in his conclusions, mis-states the BBC’s published position, and clears CMAL of criminal fraud, an allegation we did not publish.

“We would be happy to share our evidence with any formal, independent inquiry into the allegations that we did publish.

“The BBC stands by all of the journalism in the programme.”

Scottish Conservative shadow transport minister Graham Simpson said: “The terms of reference for this report are a complete joke. The BBC did not allege there had been fraud, and nobody has ever alleged that.

“The allegation made by the BBC was that the process was rigged. Barry Smith KC should have been asked to consider that question alone. Public money has once again been wasted,” the MSP added.

“The lawyer has carried out what he was asked to, but he was asked the wrong question to investigate, which is scandalous.”