CMAL deny rigging ferry fiasco contract in favour of Ferguson Marine

Scottish Government-owned CMAL said allegations made by the BBC Disclosure programme were "serious and concerning" but denied that it favoured a particular bidder.

It said that internal searches have "no evidence in our files to support" them, although it said that the claims related to events over seven years ago and that the participants were no longer employed by CMAL.

At the centre of Scotland's ferry-building scandal is two vessels that remain at the Inverclyde Ferguson yard, the completing of which will be delayed until at least next year – over five years later than planned - while costs have risen by at least two-and-a-half times from £97m to £250m.

It was claimed that Ferguson Marine obtained a 424-page document from a design consultant setting out state-controlled ferry operator CalMac's technical requirements, while other bidders had to rely on a more limited 125-page specification. But CMAL say this was not provided by them and that it seemed to be accepted that this was provided by an independent consultancy.

There were further claims that the shipyard under tycoon Jim McColl was allowed to change the design during the tendering process, making its pitch almost £10m cheaper. On the alleged change of bid, CMAL says that two bidders sought clarification which is a "normal step".

It was further alleged that there was a confidential meeting between the yard and CMAL – a courtesy not extended to other bidders in the process. But CMAL says that one face to face meeting was held with Ferguson. Other bidders participated in "similar" technical clarification engagement digitally given their non-UK locations.

It also reiterated past revelations that CMAL may have broken its own rules by allowing Ferguson to go ahead with its bid despite being unable to provide evidence of a builders refund guarantee (BRG), a mandatory financial safeguard.

The Herald revealed in May that Ferguson Marine failed to fulfil mandatory requirements to qualify as the ferry fiasco contract bidder raising fresh questions about the legality of the procurement process.

CMAL has previously stated that issues over the provision of the BRG was not an issue until after Ferguson was named as preferred bidder in August, 2015. Mr McColl has denied this and said he bid for the £250m ferry scandal contract after receiving written guidance from transport minister Derek Mackay that refund guarantees were not mandatory to win building work.

Evidence showed that the tycoon's shipyard firm which was favoured by the SNP government could not give a commitment to provide a mandatory builder's refund as required and was unable to provide other crucial financial details including records of past achievements.

Particular focus has fallen on the failure of Ferguson to offer a BRG, which would have protected public money once construction ran into problems - which it did.

The fails were revealed in a confidential Pre-Qualification Questionnaire (PQQ) completed by Ferguson and seen by the Herald before it was ever even considered as a preferred bidder for the building of two lifeline ferries to serve Scotland's islands.

It stated that an inability to meet mandatory requirements would result in exclusion not just from any future bidding process, but from the scoring exercise itself. That would mean failing at the first of what was a three-step procurement hurdle.

The guarantee had to be in place before work started and bidders such as Ferguson had to provide an "evidentiary statement" in the form of a letter from the bank confirming a willingness to provide the guarantee "if requested to show you can provide this requirement".

Ferguson remained one of six companies with the highest scores which were be taken forward to the tender stage before a preferred bidder was identified.

CMAL now says that eight months before Ferguson was made preferred bidder, the managing director confirmed to them that that it would provide bank guarantees "to required levels... that provide the security you require".

The ferry company said that "at no point did [Ferguson] state that Bank Refund Guarantees would not be provided as the contract envisaged, which led to CMAL opposing the contract being signed off in Ferguson's favour.

CMAL has previously said that it was "effectively instructed" by ministers to award the contract for the ferries. There have been allegations that an announcement surrounding the awarding of the contract was rushed so it could be made at an SNP conference.

The Herald revealed in April, that taxpayers lost over £80m after ministers provided a £106m special incentive to ensure that a ferry fiasco contract could go through without the normal financial safeguards.

It was given to reassure CMAL who had "severe misgivings" over the yard's inability to provide financial guarantees were not out of pocket if anything went wrong.

The special deal came after CMAL registered concern that they were being put at commercial risk if Ferguson Marine became insolvent or failed to deliver on the ships without the full refund guarantees.

Transport Scotland then told CMAL that ministers in their capacity of the ferry company's owners had approved the award and "authorised" it to enter into the contracts.

CMAL have since told Audit Scotland they will no longer allow Scottish ministers to stop them from securing mandatory financial safeguards in procuring new vessels.

It subsequently said the process that led to a Scottish Government intervention that forced them to award the contract despite its serious concerns about a lack of mandatory financial safeguards was "not normal".

CMAL said: "Because the formal tender bid by Ferguson was unqualified, until August 21, 2015 CMAL were unaware that the draft contract requirements could not be fulfilled. It was after FMEL was announced as preferred bidder in August 2015 that FMEL confirmed it could not provide the required BRGs."

A spokesman added: "The procurement process for the dual fuel vessels contract was subject to an audit by the Scottish Government’s Procurement Services team, and this audit found no issues with non-compliance.

"The dual fuel ferry project has been subject to the scrutiny of two parliamentary inquiries and a comprehensive analysis and report published by Audit Scotland. Throughout these independent investigations, CMAL has provided significant written and verbal evidence to all three probes, all of which is in the public domain. Our senior management team and Board have been wholly cooperative and transparent throughout these inquiries.

"CMAL’s concerns in relation to the award of the two contracts in 2015 are now well-documented - in the Audit Scotland report published in March 2022, and in evidence to the Public Audit Committee in June 2022. Our concerns led to our stated preference to re-start the procurement process. This position and course of action contradicts the suggestion or allegation of favour towards a particular bidder."

CMAL insisted the evaluation process for the vessel contracts was anonymised. "CMAL employed an independent expert marine consultancy to support this anonymous evaluation of the tender bids received. Of the six shortlisted yards that received the ITT [Invitation to Tender], it is understandable that certain details of the shipyards' track record and facilities described in their bids may have revealed or suggested which is which, especially to experts in our team who have significant shipbuilding industry experience," it said.

"CMAL did not provide [Ferguson] with a copy of the Caledonian MacBrayne Statement of Operational and Technical Requirements (SOTR) for the dual fuel vessels. The BBC appears to accept that the SOTR was provided to [Ferguson] by a technical consultancy and not by CMAL."