Just when you thought the MoD could not be any more ham fisted they manage to completely screw something up so spectacularly it restores your faith in their rank incompetence. Widely covered in the press this week is the decision to abandon the £6 billion SAR-H PFI in the light of allegations of skulduggery and dodgy dealing.
The MoD police are now investigating the preferred bidder, Soteria, after allegations that a former member of the joint Ministry of Defence/Department for Transport integrated project team (IPT) assisted the consortium in its bid preparation by providing access to commercially sensitive information. The individual then apparently went to work for Soteria.
The Secretary of State for Transport (Phillip Hammond) said;
“On 16 December I and my Rt Hon Friend the Secretary of State for Defence announced that information had come to light regarding the preferred bid in the Search and Rescue Helicopter competition which required clarification.
“In mid-December, the preferred bidder in the SAR-H competition, Soteria, voluntarily came forward to inform the Government of irregularities regarding the conduct of their bid team which had only then recently come to light. The irregularities included access by one of the consortium members, CHC Helicopter, to commercially sensitive information regarding the joint MOD/DfT project team’s evaluations of industry bids and evidence that a former member of that project team had assisted the consortium in its bid preparation, contrary to explicit assurances given to the project team at the time.
“Since December, our two Departments have been working with Soteria to better understand the situation and its implications for the procurement process. In addition, the Ministry of Defence Police are investigating how the commercially sensitive information came to be in the possession of the bidder. It would be inappropriate to comment further on the details of the investigation until it has finished.
“However, even without the outcome of that investigation, the Government has sufficient information to enable it to conclude that the irregularities that have been identified were such that it would not be appropriate to proceed with either the preferred bid or with the current procurement process.
“The Department for Transport and the Ministry of Defence will now consider the potential procurement options to meet future requirements for search and rescue helicopters in the United Kingdom, including options to maintain continuity of search and rescue helicopter cover until new longer term arrangements can be put in place.
“We will make a further announcement once a way forward has been agreed.”
Soteria is a consortium comprising the Canadian operator CHC, Sikorsky, Thales and the Royal Bank of Scotland (yes, the one the taxpayer owns) although RBS bailed out just before Christmas when the allegations emerged. In all fairness to Soteria, it was they who fessed up with their concerns,it wasn’t of course the MoD, lets face it, they would be lucky to find water if they fell out of a boat.
Currently, SAR helicopter operations are carried out by the Royal Navy and the Royal Air Force flying the Westland Sea King, and by the Maritime and Coastguard Agency (MCA) using a mix of S-92s and AW139s provided by CHC under an interim contract. Under the Soteria SAR-H bid, this mixed fleet would have been replaced with a single fleet of Sikorsky S-92As based at 12 stations around the country. The service was due to be in place by 2016, when the Sea King is planned to exit service. The losers, AirKnight (Lockheed Martin UK, VT Group and British International Helicopters) will no doubt feel rather agrieved. British International Helicopters currently service military contracts in the Falkland Islands and for Royal Navy Operational Sea Training.
It was reported that the MoD would pay two thirds of the costs and the Department of Transport, the balance. The contract was reportedly was designed and the service would have been a boost to capabilities, much better aircraft for example, S92′s instead of Sea Kings and AW139′s. However, some doubts were raised such as the the differences between the words capability and effectiveness when used to describe the level of service comparison between the existing and new.
Scheduled to start operation in 2012 the requirements included launch within 15 minutes during the day, within 45 minutes at night and be able to reach all ‘Very High Risk Areas’ and 75% of ‘Medium Risk Areas’ within 60 minutes, the service also had to have the ability to surge aircraft when required.
The Soteria bid was widely recognised as being excellent, the requirements had been refined over a number of years and the bid process open and detailed, I am sure it would have been a highly professional, if PFI style expensive, service.
Always ready with an interesting quote, Bob Crowe, the general secretary of the Rail, Maritime and Transport union said;
‘This whole sordid and botched episode shows that the raw greed of the private sector should never be allowed anywhere near life or death rescue services on the high seas. Millions of pounds of taxpayers’ money has been wasted and the whole plan should now be scrapped, not shelved.’
More Than Meets the Eye
I wonder if the ‘bad apple’ narrative is a cover for something else and whilst I started this post with a cheap shot at the MoD the more I think about it, the more I think there is more than meets the eye.
Despite the technical requirements being very detailed, the desire to retain military aircrew and a politically motivated desire to retain 12 operating locations (possible more than needed with the modern helicopters being proposed) meant the contract vehicle ended up being a bit of a hybrid, restraining the ability of the operator to drive down costs and make a profit. Soteria are not a charity, they have a duty to their shareholders, lets not forget that.
In the period between naming Soteria as preferred bidder and contract award that never happened, two crucial events took place.
First, it was announced in December that military aircrews would not be part of the deal in a bid to cut costs.
Second, RBS withdrew from the consortium, again in December, without stating why.
The current narrative is that Soteria became aware of irregularities, reported it to the MoD and upon hearing of these issues, RBS wanted to put some distance between them and the deal. The news about the member of the IPT was released and everyone assumes that the skullduggery is the open and shut reason why we are where we are.
How about a few of idle conspiracy theories;
Removing the military aircrew makes the contract extremely difficult to deliver against and signals a lack of commitment from the PFI hating government, RBS realise they are never going to make a return and pull the plug. Soteria decide their best route out is to suddenly own up.
The government know that the deal is hugely expensive, have been scathing about PFI’s in opposition (some quotes from Phil Hammond and Liam Fox here) and after Nimrod and other MoD failures decide enough is enough. How could they collapse the deal without looking even worse than they do now, have a quiet word with RBS and suggest it might be in everyone’s interest if they withdraw from the consortium and did they know about a member of the IPT who went to work for Soteria?
Facing the prospect of ‘signing on’ Prince William was subsequently reported to be lobbying David Cameron to reverse the decision. David Cameron decides not to go forward with a contract that would see the heir to the throne issued with a P45 and concocts some means of cancelling the contract, see above!
Now some of these may well be the product of a fevered mind and I don’t have the first clue what actually happened (I would point out I am not making an accusation) but some of the timing does appear somewhat convenient. The individual has been named but I am not inclined to repeat it here because the man’s reputation has been ruined before the facts come to light.
Is there more to this than meets the eye or is it simply a case of a bad apple, I suspect we will never know.
Whatever the conspiracy theory, whatever the actual reality, the fact is we need to decide what comes next.
Before what happens next is decided the Sea Kings will have to soldier on, although some of them are not as old as you might think. Merlins were discounted early on because of their massive costs and significant rotor downwash so punting the RAF’s Merlins on to the SAR force seems a non starter.
I have mixed feelings about SAR remaining as a military task, retaining it within the MoD allows a larger pool of aircrew to be maintained, reduces ‘brain drain’ to the private sector and improves the image of the armed forces within the country but how much ‘actual’ movement between SH and SAR communities occurs and is it really a military task?
The more combat oriented search and rescue, or joint personnel recovery on operations, is carried out by the Support Helicopter function or more likely by the USA and in the context of a decreasing defence vote I think it becomes less and less important to retain it as a military task.
The search and rescue task, fixed and rotary, is an extremely complex task and the current mixed provision does not on face value seem to be an efficient means of delivering that task.
Whilst I do not think it is necessarily a military task it certainly is a public sector task, the actual responsibility still rests with the Department of Transport, not the MoD.
Is it about time we had a coastguard that was equipped for all aspects of maritime patrol and search and rescue?
Or even a Government Aviation Service that provides all non military aircraft, fixed and rotary?