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County council issues findings of review after successful procurement challenge by incumbent parking enforcement contractor costs £1.6m

Oxfordshire County Council has published the findings of an external review launched after the existing parking enforcement contractor made a successful challenge to the local authority’s procurement award process.

A report due to be presented to a meeting of the authority’s Audit and Governance Committee next week (3 March) showed that the total cost of dealing with Marston Holdings’ claim was £1,607,338.57.

Marston Holdings had alleged in June 2019 that the procurement of Oxfordshire’s parking enforcement contract had been undertaken contrary to the Public Contracts Regulations 2015.

The council’s subsequent application to lift the stay on awarding the contract was expedited by the court and considered on 7 August 2019.

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The report for the Audit and Governance Committee said a detailed disclosure was undertaken with a subsequent conference with a leading QC, who “identified significant failings in the evaluation exercise” and provided a detailed advice identifying the specific issues of concern.

Counsel identified Oxfordshire’s chances of success in defending the challenge as being poor and that Marston Holdings’ chances of success were in the region of 75%-85%.

The report said a complex negotiation process was then undertaken by the parties in preparation for a costs hearing before the Court. “The council in preparation for a costs hearing presented detailed points of dispute, which together with a robust negotiation strategy, ensured that the original costs was significantly reduced.”

The Audit and Governance Committee report said that as a result of the council’s decision to settle the case, Oxfordshire also became liable for the legal costs incurred by Marston Holdings in bringing the claim. “The original bill of costs identified a cost claim of £649,972.05 which was in the opinion of the cost draftsman instructed, excessive and without merit.”

On advice of counsel and in consultation with the relevant Portfolio Holders, a final settlement figure was agreed.

Following the successful challenge, Oxfordshire’s chief executive, Yvonne Rees, instigated an internal review. She then commissioned an externally-led, full review of the procurement and subsequent litigation actions, settlement and costs associated with the challenge. The investigator had previous experience of this type and was sought via a referral from the council’s external legal advisors, Bevan Brittan.

The report, prepared by two of the council's corporate directors,, noted that it was “important to recognise that the issues associated with this investigation began at the outset of the procurement (pre-tender work) which commenced in November 2017” and that the council had already recognised that procurement was an activity that required significant development and support as part of the transformation business case adopted in 2018. It added that the issues considered in the investigation spanned several services areas and a number of years.

The review found:

  • The quality of the initiation preparations for the tender process and the resulting documents was weak.
  • There were a series of issues, some minor and some more significant, around record keeping, procurement guidance, the experience of some involved and the clarification sessions undertaken as part of the process.
  • There was inconsistent management and the use of agency and temporary workers within both the service and procurement teams prevented full oversight and the appropriate escalation of risks and issues.
  • There were issues with regards to the procurement guidance in use by the council, this resulted in poor process, particularly with regards to records keeping.
  • There were a series of assumptions and miscommunications by officers that led to both portfolio holders not being properly briefed with regards to the settlement of the case.
  • There was no ill intent but that the CEO’s expectations around how Cabinet members should be briefed throughout the process were not met or fully understood.
  • Whilst the decisions made relating to the case and its settlement were within the framework of the council’s constitution and delegations the report found that the extent to which the CEO had been effectively and proactively briefed fell below reasonable expectations.

The key recommendation from the fact-finding review was that a full management response and action plan be prepared by the Corporate Director, Commercial Development, Assets and Investment and agreed by the commissioning officer (the Corporate Director of Customers and Organisational Development), the Chief Executive and the Monitoring Officer.

It was also recommended that no disciplinary investigations be commissioned as the nature of the findings was such that a systemic failure occurred over a prolonged timeframe. “There was not enough evidence to suggest this was the consequence of a lack of competence or purposeful action by clearly identifiable individual or group of individuals.”

In a statement Oxfordshire said it had taken “exceptionally seriously” the matters relating to procurement and contract management, which were outlined in the report.

The council said: “The events relating to the circumstances in question and the broader picture have been examined in great detail both by internal staff and by an independent external reviewer with wide-ranging expertise in these areas. These thorough investigations have led to a detailed list of actions, which are now fully embedded into how the county council operates.”

The council added that separate to the introduction of “rigorous new procedures”, there had been significant personnel change at the council since the period when the circumstances in question occurred, including a fully redesigned structure and process for purchasing goods and services.

Chief executive Yvonne Rees said: “It was clear to me from the outset that the responsible thing to do was to fully review this situation with the assistance of experts from outside the organisation. That thorough review has been undertaken.

“The council has accepted in full the recommendations that have been made. Building on this, there is a resolute determination throughout the organisation to minimise the chances of such circumstances ever re-occurring.”

Monitoring Officer Anita Bradley added: “We have followed to the letter the correct and proper process for conducting a review of this nature. We are acutely aware that we are accountable to the Oxfordshire public and that we have a duty to be honest and transparent in our management of public money.”

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