Stagecoach disqualified from three franchise competitions

[ah-media]

From BBC Business Live this morning:

Stagecoach disqualified from rail bids


Stagecoach says it has been informed by the Department for Transport that it has been disqualified from three UK rail franchise competitions.

It's out of the running for East Midlands; South Eastern, which is a joint bid with Alstom; and West Coast which is a joint bid with Virgin and France'ws SNCF.

How come? "A senior DfT official has verbally informed Stagecoach that it has been excluded from all three competitions for submitting non-compliant bids principally in respect of pensions risk," it said.

Stagecoach Group Chief Executive Martin Griffiths said: "We are extremely concerned at both the DfT's decision and its timing. The Department has had full knowledge of these bids for a lengthy period and we are seeking an urgent meeting to discuss our significant concerns."

https://www.bbc.co.uk/news/live/business-47829683

 

[jw]

I hope that the DfT are iron-clad in their reasoning here otherwise those 3 franchise competitions will be bogged down in legal machinations for months. West Coast Partnership is the jewel in the Crown and I can't imagine they'll go quietly.

 

[DarloRich]

They appear to have been disqualified on the basis of pension risk and are held to have submitted a non compliant bid

 

[LNW-GW Joint]

We'll have to see what the Stagecoach situation does to the West Coast bid, and it might also mean the end of Virgin in rail franchising.
For WCP, Stagecoach would have led the bid, with Virgin and SNCF in support.

 

[DanTrain]

Stagecoach shares dip 8%
Getty ImagesCopyright: Getty Images
Stagecoach shares are down sharply after the company said it has been disqualified from three major rail contract bids.

It appears that the government wanted bidders to guarantee to meet current pension obligations under the Railways Pensions Scheme and Stagecoach didn't include this in its bid. The government isn't very sympathetic.

A DfT spokesperson said: “Stagecoach is an experienced bidder and fully aware of the rules of franchise competitions. It is regrettable that they submitted non-compliant bids for all current competitions which breached established rules and, in doing so, they are responsible for their own disqualification.

“Stagecoach chose to propose significant changes to the commercial terms for the East Midlands, West Coast Partnership and South Eastern contracts, leading to bids which proposed a significantly different deal to the ones on offer."

https://www.bbc.co.uk/news/live/business-47829683

More from the BBC - looks like they tried to change the terms of the bid beyond what the Daft thought was permissable. I bet someone's got a bit of a headache this morning!

 

[ainsworth74]

A reminder that this thread is about Stagecoach being disqualified from three franchise bids. It's not for discussing those bids themselves unless its directly related to the Stagecoach issue.

 

[Bletchleyite]

So that basically means the guaranteed end of Virgin Trains as a brand. That's quite big news.

 

[whhistle]

So that basically means the guaranteed end of Virgin Trains as a brand. That's quite big news.

I wonder if this was a sneaky way of getting [Virgin] out?

 

[MalaiseForever]

So that basically means the guaranteed end of Virgin Trains as a brand. That's quite big news.

Quite a shame if true, sure they have problems like any TOC, but I’ve always found them to do a good job overall on the WCML.

 

[Bletchleyite]

I wonder if this was a sneaky way of getting [Virgin] out?

I very much doubt it.

 

[RealTrains07]

I feel like the DfT have acted really petty towards stagecoach i mean, they have been looking for an excuse to kick them out for ages just to avoid another east coast disaster

 

[DarloRich]

I feel like the DfT have acted really petty towards stagecoach i mean, they have been looking for an excuse to kick them out for ages just to avoid another east coast disaster

Clearly you don't understand tendering. If you submit a non compliant bid you will, in all likelihood, find your bid rejected. It isnt about being petty. It is about fairness and rules.

BTW - nice to see you think railway workers being paid their pensions is something petty.

 

[paulravuslante]

The curse of the East Coast strikes again! Sea Containers, National Express and now Stagecoach have all been struck off!

 

[Journeyman]

Quite a shame if true, sure they have problems like any TOC, but I’ve always found them to do a good job overall on the WCML.

I certainly won't miss their ZANY/WACKY/CRAZY!!!!!11!!!1! corporate culture, though, which is extremely irritating as a customer, and infuriating if you want to work for them, but aren't a vacuous bubbly airhead.

 

[NoMorePacers]

Meanwhile Govia get to continue as normal.

 

[DarloRich]

I certainly won't miss their ZANY/WACKY/CRAZY!!!!!11!!!1! corporate culture, though, which is extremely irritating as a customer, and infuriating if you want to work for them, but aren't a vacuous bubbly airhead.

aka: They knocked me back for being a curmudgeon and chose someone i don't think is like me The corporate culture and ethos of Virgin is hardly a secret. TBH i think it would do my head in!

 

[Glenn1969]

I do wonder whether we have heard the last of this. Could they challenge the decision to disqualify them in court?

 

[YorkshireBear]

Clearly you don't understand tendering. If you submit a non compliant bid you will, in all likelihood, find your bid rejected. It isnt about being petty. It is about fairness and rules.

BTW - nice to see you think railway workers being paid their pensions is something petty.

Sometimes people love a conspiracy though!

Completely agree about pensions, this is not something petty at all.

 

[Journeyman]

Clearly you don't understand tendering. If you submit a non compliant bid you will, in all likelihood, find your bid rejected. It isnt about being petty. It is about fairness and rules.

Absolutely - it's still early days, so we don't know why all this has happened, but I've been close to a major (non-rail) franchise bidding process and saw exactly the same thing happen - if you can't bid according to the rules, you won't get anywhere. Also, I can't help thinking that Stagecoach would really be under the spotlight following the VTEC debacle.

BTW - nice to see you think railway workers being paid their pensions is something petty.

The Railway Pension Scheme is about the only decent one left, so yeah, it's a pretty big deal.

 

[nlogax]

From my personal experience they've provided a very good service over the many years I've been using them and I'll be sad to see them go. Talking loos aside, of course.

 

[DarloRich]

Absolutely - it's still early days, so we don't know why all this has happened, but I've been close to a major (non-rail) franchise bidding process and saw exactly the same thing happen - if you can't bid according to the rules, you won't get anywhere. Also, I can't help thinking that Stagecoach would really be under the spotlight following the VTEC debacle.

non compliant bids can be accepted but it is a danger in doing so as it simply leads to complaints from all other bidders and the potential for legal challenges, which stagecoach may well lodge

 

[paulravuslante]

Clearly you don't understand tendering. If you submit a non compliant bid you will, in all likelihood, find your bid rejected. It isnt about being petty. It is about fairness and rules.

BTW - nice to see you think railway workers being paid their pensions is something petty.

Quite, but the DfT made mistakes before in the West Coast franchise competition which lead to the suspension of all franchises being let for a considerable time. Who can say they haven’t bungled it up again?

 

[hwl]

Sometimes people love a conspiracy though!

Completely agree about pensions, this is not something petty at all.

Ditto, post VTEC bidding Stagecoach became very conservative and realistic bidders intent on not getting burnt again. With these 3 bid they show all the singe of being sensible and conservative again which isn't what DfT want and they were desperately trying to off load pension risk. One of th ecore issues is that the pensions regulator didn't think DfT had it sums right and understood the risks leading to moving goal posts during the SE tender hence I suspect there may be good grounds for appeal.

 

[DarloRich]

Quite, but the DfT made mistakes before in the West Coast franchise competition which lead to the suspension of all franchises being let for a considerable time. Who can say they haven’t bungled it up again?

lets see if Stagecoach lodge a legal challenge.

 

[Journeyman]

aka: They knocked me back for being a curmudgeon and chose someone i don't think is like me The corporate culture and ethos of Virgin is hardly a secret. TBH i think it would do my head in!

Haha! Not quite. I did apply for some jobs with them, but realised pretty quickly I'd hate working there. I'm bit of an introvert, which they clearly don't like. Sadly, although they've gone from East Coast, the culture doesn't seem to have changed much. The recruitment process is absolutely ghastly. I pulled out of an application recently when I realised that step one of the assessment process was an escape room.

What is this, a stag party?

 

[Gems]

This is good news. Has Grayling at last got something right?

Stagecoach decided to ignore the commercial rules of the franchise bid, Stagecoach got put in it's place. Stagecoach needs banning for good.

 

[Bletchleyite]

Meanwhile Govia get to continue as normal.

And Arriva, whose TOCs (and bus operations) are/were all utter dross. Chiltern excepted, but that'll take a while for them to foul up.

 

[Mathew S]

I certainly won't miss their ZANY/WACKY/CRAZY!!!!!11!!!1! corporate culture, though, which is extremely irritating as a customer, and infuriating if you want to work for them, but aren't a vacuous bubbly airhead.

Or alternatively, if it is the end of Virgin, I'll miss their fun, light-hearted approach and willingness not to take life too seriously, while getting the job done and really trying to do their best by their customers.

I can't help thinking that this will end up being a repeat of 2012 with Stagecoach/Virgin challenging the process, and there being months, even years, of legal stuff before it's settled, all of which impacts on HS2, not to mention the WCML itself.

 

[nuts & bolts]

I certainly won't miss their ZANY/WACKY/CRAZY!!!!!11!!!1! corporate culture, though, which is extremely irritating as a customer, and infuriating if you want to work for them, but aren't a vacuous bubbly airhead.

I certainly won't miss their themed departure announcements at Euston, I cannot understand why the other two TOC's allow it to happen!

 

[Tio Terry]

DfT have been smarting ever since Virgin challenged them over the West Coast fiasco, that's why Stagecoach lost SWT and now the DfT are punishing them over this. It's not unheard of, during the tender process, for the DfT to ask a tenderer if they meant what they said in their bid or if they want to reconsider something rather than throw them out at the first hurdle.

Me thinks DfT getting their own back!