'Disappointed' bidder sues MAT after MIS Tender failure

[vikpaw]

Warning to be careful when procuring services to follow the Schools, LA / Academy Group and EU (for now?) rules as disappointed vendors may come back to bite.

 

https://schoolsweek.co.uk/trust-embroiled-in-2m-contract-legal-row-amid-move-to-the-cloud/

 

Good to see our very own @bringmoredata talking sense there, and getting some exposure on the useful stats he's produced.

 

EduGeeks are reminded that this story is about legal action and to take care not to prejudice themselves or their employer when responding.

[Steve21]

So the TLDR version is Bromcom lost the tender and are now complaining that because some schools in the whole trust already used one of it's rivals MIS that it should be paid? *facepalm*

 

I mean despite the extra allegations of miscalculating fees etc, is there anything that actually says a tender has to go to the lowest bid if there is a reason they've selected someone else? Else surely the same arguement could apply to why any tender ever picks a Tier1 supply over cheaper

 

Edit - As a clarification if anyone asks, the phrase "most economically advantageous tender" or MEAT method isn't just about finances it falls under about 12 criteria

 

Steve

Edited October 10, 2020 by Steve21

[vikpaw]

Crazy right! One of the biggest factors we look at are the hidden costs which can't be easily documented or have a number put on them.

[MatthewL]

I mean despite the extra allegations of miscalculating fees etc, is there anything that actually says a tender has to go to the lowest bid if there is a reason they've selected someone else? Else surely the same arguement could apply to why any tender ever picks a Tier1 supply over cheaper

 

My understanding is that no it doesn't have to go to the lowest, it shows you have explored the market and weighed each one up against each other and your reasons for, I stand to be corrected by by going down the tender process it means you are no favouring one supplier. I do know that some tenders are written in a way to favour such suppliers by putting lines in there that other suppliers cannot meet therefore knocking them off the list.

 

I don't know the ins and outs of it all but I am on the understanding its all to do with the public money side of things, in theory Joe Blogs private office ltd doesn't have to go down this route but many do choose to get the value for money.

[DrCheese]

I suppose this is one of the risks now with large academy trusts - Schools on their own would unlikely ever really be large enough to trigger some of the really strict tendering processes, nor be a large enough "loss" to a bidder to matter.

[elsiegee40]

There are set rules on how public money is spent. For schools these are set out in the Academies’ Financial Handbook (for Academies, Free Schools and MATs) and Schools Financial Value Standard (SFVS) (for LA Maintained schools)

 

Three quotes required above a set value.

Advertised for tender if above the EU limit (£189,000 currently)

 

Every MAT should have a procurement procedure that is followed. Maintained schools will be bound by their LA’s procurement procedure

[Ditto]

I thought Bromcom had prior history in this sort of thing - and the article confirms this. I fear the reputational damage will be hard to assess but ultimately the lawyers win financially and I'm sure United Learning would prefer to focus on education. That said, I guess the laws are there for a reason and procurement process can be challenged - it's one of the prices we pay to try to have a fair marketplace. This does make me wonder more about SIMS. In previous articles, it's been suggested schools/trust moving from current SIMS to cloud version (if it ever hits the market at scale) would be required to follow procurement regulations. If that is true, schools/trust are going to have to be very careful to show they have followed the correct process - which might work against SIMS longer term ambitions.

[Ditto]

In my role as a governor, I've not been involved with a contract over the EU limit, but it is an interesting area. From https://www.gov.uk/guidance/buying-procedures-and-procurement-law-for-schools/buying-things-that-are-over-the-eu-procurement-threshold, it's clear there is a 'standstill period' after notifying the winning bidder. In this 10 day period, losing bidders can challenge and the buyer needs to reply. The guidance suggests if a legal process ensues, then don't finalise the contract. I'm not clear in this case if the challenge has come in the 10 day period, but if it has, it must rankle Arbor. If outside the period, well, you'd think it wouldn't help Bromcom's case not following the process.

[Sheridan]

One of the joys of the ever bigger MATs - bigger contracts, bigger legal battles. This probably won't be the last of this type of thing

[Steve21]

Just find it funny how United do a lot of tenders, and aren't exactly hiding information (https://unitedlearning.org.uk/tenders/mis#) that was required

 

But I do wonder if the story is a bit behind date wise considering the timing on the tenders:

Final Tender submission deadline is 23 Mar 2020.

Preferred Bidder announcement is 03 Apr 2020.

Contract signature is 30 Apr 2020

 

As if they announced it in July (from my memory someone posted it on here then), that seems to have already been months between the signing and announcement, unless it was delayed ofc (Covid wise)

 

Steve

Edited October 10, 2020 by Steve21

[localzuk]

As I said in a tweet earlier, this will be pretty damaging to Bromcom's reputation. Most MIS procurement will still be below tendering level, as there are very few MATs of that size, so this sort of thing will instantly put a black mark against their name for a lot of decision makers.

 

Add in their history of litigious behaviour and this is likely going to cost them more in the long run than they would make from having won this tender.

 

Schools talk to each other, even now, in the age of academies. Many schools still consider Bromcom to be pretty much a dirty word. This will just confirm it for them.

 

And all that is regardless of the merit of the case.

[DGardiner]

As I said in a tweet earlier, this will be pretty damaging to Bromcom's reputation. Most MIS procurement will still be below tendering level, as there are very few MATs of that size, so this sort of thing will instantly put a black mark against their name for a lot of decision makers.

 

Add in their history of litigious behaviour and this is likely going to cost them more in the long run than they would make from having won this tender.

 

Schools talk to each other, even now, in the age of academies. Many schools still consider Bromcom to be pretty much a dirty word. This will just confirm it for them.

 

And all that is regardless of the merit of the case.

Exactly, why even invite bromcom to the table if this is how its gonna be played out.

 

Even if the schools used the competitor in 15 schools, this is likely whats been a catalyst for the MIS change and would obviously be a prefered supplier, 15 schools you dont have to retrain $$$$ and already held expertise on using the system of course theyre gonna have a leg up.

 

Even if bromcom was cheaper by a mile, if the schools see the functionality they need in arbor then thats their choice.

[Steve21]

Exactly, why even invite bromcom to the table if this is how its gonna be played out.

 

Even if the schools used the competitor in 15 schools, this is likely whats been a catalyst for the MIS change and would obviously be a prefered supplier, 15 schools you dont have to retrain $$$$ and already held expertise on using the system of course theyre gonna have a leg up.

 

Even if bromcom was cheaper by a mile, if the schools see the functionality they need in arbor then thats their choice.

 

The irony being it even says in the tender, that their are some cloud MIS schools, and this tender is for the rest + new schools who join. So sounds like those weren't going to change whoever won...

 

And yeah I guess it just goes against the "we're the best" attitude we keep getting from the PR bots etc if they don't win the largest contracts will no doubt make others wonder why

 

Steve

[vikpaw]

Just find it funny how United do a lot of tenders, and aren't exactly hiding information (https://unitedlearning.org.uk/tenders/mis#) that was required

 

But I do wonder if the story is a bit behind date wise considering the timing on the tenders:

 

 

As if they announced it in July (from my memory someone posted it on here then), that seems to have already been months between the signing and announcement, unless it was delayed ofc (Covid wise)

 

Steve

Good memory! There must have been some delay. This was the original post: http://www.edugeek.net/forums/mis-systems/216463-arbor-wins-big-mat.html

 

It's interesting that according to the article the potential legal costs could be more than half their post tax trading profit from last year. Not only harming education budgets at a time when we're all suffering enough, but wiping out half your profits to boot?! Struggling to understand that logic. I wonder how their marketing budget compares...

 

Worth knowing the tender publication process changes post 2020 -> https://www.gov.uk/guidance/public-sector-procurement-after-a-no-deal-brexit

[Ditto]

Good memory! There must have been some delay. This was the original post: http://www.edugeek.net/forums/mis-systems/216463-arbor-wins-big-mat.html

 

It's interesting that according to the article the potential legal costs could be more than half their post tax trading profit from last year. Not only harming education budgets at a time when we're all suffering enough, but wiping out half your profits to boot?! [emoji782] Struggling to understand that logic. I wonder how their marketing budget compares...

 

Worth knowing the tender publication process changes post 2020 -> https://www.gov.uk/guidance/public-sector-procurement-after-a-no-deal-brexit

Reputational damage should not be under-estimated. In today's world of fast moving social media, word spreads far and wide very quickly. There was a role there not so long ago that appealed. Distance was a concern so I did some research. If you review comments on Glassdoor for the two MIS providers in question - well, it certainly had an impact on me.

[Bromcom-PR]

Seeking justice in a procurement case:

Public procurement is a serious matter and no less than in education. If bidders are intimidated with prejudices and reputational damage, this would undermine to secure the very key rights and principles of fair, transparent and equal treatment of bidders in procurement processes, the contracting authorities taking for granted that no one will dare to challenge the decisions.

Commercial disputes in vast majority of cases stay private unless leaked to press by parties who see advancing their causes or market interests. One should question who would be in this case and whether holding a kangaroo court in social media and building prejudices are serving justice and supporting the sector or such parties.

Clearly it is very important that suppliers of schools can have confidence that the competitions that they participate in are conducted fairly given the investment everybody makes in these competitive processes and the sector in cloud does not fall in the trap of previous era where all attempts failed to correct viz a viz Becta Report 2010 (Reference 1).

Finally the CCC case referred to in the news article shows that Bromcom was proven to be correct in both of its actions and consequently today many CCC schools enjoy cloud based products and benefitting cost and functionality because of this action.

As to Bromcom’s position - here is a short version and a longer one:

A short version:

The last thing that Bromcom want to do is be in court proceedings with MATs but we pursued these court proceedings as a very last resort where we thought the way the process was conducted by UL was highly unsatisfactory and UL have delayed in disclosing key documents of the competition through which the fairness of the process could be verified. We think that it is very important that suppliers of schools can have confidence that the competitions that they participate in are conducted fairly given the investment everybody makes in these competitive processes.

A longer version:

The MIS market suffered from the failures of procurement processes over the past 15 to 20 years which was confirmed in a Becta Report 2010 (Reference 1). This held back the market as well as schools, and hence 75% of schools today are still non-cloud, costing £ billions with a lack of functionality - all disadvantaging the education of children.

In 2020, as the veteran of the sector, Bromcom wishes nothing less than to make sure procurement processes are not misguided and the sector does not fall into a similar pattern with MATs.

Despite United Learning’s (UL) tender being based on OJEU, the tender structure and processes fell well short of fundamental standards such as an approach to due diligence, unequal treatment of the bidders, moderation process in scoring, miscalculations/errors etc..

Due Diligence:

Despite the preferred bidder having only abbreviated and indeed unaudited accounts available, UL relied on simple credit agency ratings for the Selection Question to pass the preferred bidder. The Government Procurement guidance on due diligence expects the contracting authority to classify the contract under Gold, Silver and Bronze, which for the size of the contract and critical nature of MIS, would fall under Gold or at least Silver categorisation (Reference 2). Accordingly a simple credit rating score is insufficient and therefore the contracting authority needs to carry out tests on eight key metrics. An independent consultancy has an assessment of the financials for the key MIS providers in this market and published their findings (Reference 3). The fact that the preferred bidder, at the time of shortlisting (in November-December 2019), only had abbreviated unaudited accounts meant that this was paramount. It is self-evident how each MIS supplier stood during the period over which UL conducted their tender, and these figures remain the most up to date available as far as we are aware.

Unequal treatment of the bidders and back drop:

UL already had over 10 schools in the MAT using the preferred bidder’s solution and those schools were excluded from the procurement. Furthermore, UL had four schools within their MAT in the process of procuring/rolling out the MIS from the preferred bidder overlapping the period of the formal. These four schools who switched over during May 2019 and January 2020, had not sought quotes from any other provider, with the selected supplier ending up as the preferred bidder for the formal UL procurement. Basic DfE guidance is to seek a quote from three different suppliers (Reference 4). Hence having procurement and deployment going on with one of the bidders during the process clouds what should be formal relationships, especially where the supplier is one of the bidders and goes on to be selected as the preferred bidder.

Miscalculations/errors in evaluation scores:

Arithmetic errors in the total cost of ownership calculations surfaced. During the de-briefing session, Bromcom was assured that the figures had been carefully checked and would, given our concern, be subject to a “double, double check”. Despite this assurance, Bromcom subsequently found arithmetic errors in the total cost of ownership calculations. The original result between the final two bidders had a difference of 1.6%. UL accepted these errors and reduced the difference down to 1.2%. Bromcom believes there are more errors and UL’s resistance to allow Bromcom to have access to the total cost of ownership calculations to verify the correctness, justifies Bromcom’s deep concerns in this respect.

Conclusion:

Bromcom has not taken this action lightly. However we believe fair, transparent and equal treatment of bidders are essential for the healthy future of the sector as it is going through seismic change. We hope UL’s case will help to bring transparency and to make sure the past experience of the MIS sector does not repeat itself with MATs.

References:

1.https://dera.ioe.ac.uk/15716/1/school%20management%20information%20systems%20and%20value%20for%20money%202010.pdf

2. https://main-abbolt-acca.content.pugpig.com/2020/09/04/14sept_pub_tendering_uk/content.html

3. https://www.linkedin.com/posts/phil-sanders_educationtechnology-education-schoolmanagementsoftware-activity-6686696103171112961-2mY2

 

4. The Academies’ Financial Handbook (for Academies, Free Schools and MATs) and Schools Financial Value Standard (SFVS) (for LA Maintained schools)

Edited October 11, 2020 by Bromcom-PR

[Ditto]

I appreciate the detailed reply from Bromcom. As I stated earlier, I respect the right to make a legal challenge. I suspect U.L. won't want to put their viewpoint here, and I'm sure it is better left to the legal process. At this point, I'll add no more to the thread and await the outcome of the legal process. Edited October 11, 2020 by elsiegee40

[localzuk]

As I said in response to the tweets defending the legal action on Twitter, all of this doesn't really deal with the reputational damage such a case will have.

 

I completely understand your desire for a fair process, but I do feel your company is underestimating the damage this is doing to your reputation.

 

As I said earlier in this thread, most MIS procurement is still done on a small scale, far below the tendering limit. When searching the market for suppliers, schools will now see that once again, your company has resorted to legal action. Rightly or wrongly, it doesn't matter.

 

So, smaller procurements will simply not include your company at all because they'll fear a court case should they include you and then decide not to use your services. Why take that risk?

 

Yes, it seems unfair, but ignoring the reality of how people look at this sort of thing, in favour of the technical correctness of a process will do far more harm to your business than you think.

 

As I said previously, there are many within education who were just starting to get over the prior dislike of Bromcom as a company. This case is about the worst thing you could have done in terms of damaging your reputation.

 

But anyway, too late now, the damage is done.

Edited October 11, 2020 by localzuk

[Primus]

Conversely, as someone who will be part of the process of replacing the MIS across a MAT, Bromcom's actions don't put me off them at all. Not everyone will feel as strongly about it as some on here do.

 

In addition there's a bit of a dearth of quality competing products so failing to consider Bromcom as part of your process would be cutting your nose off to spite your face.

 

If you follow your compliance processes correctly and the law correctly you have nothing to fear - if Bromcom lose they'll be paying all the legal fees. Conversely if you don't then you can expect to be paying for that error.

[ABC123]

It's interesting that according to the article the potential legal costs could be more than half their post tax trading profit from last year. Not only harming education budgets at a time when we're all suffering enough, but wiping out half your profits to boot?! Struggling to understand that logic. I wonder how their marketing budget compares...

I would actually say that until this case is concluded, the risk of Bromcom losing this legal action means they should be considered less financially stable when assessing based on financial standing in future tenders. Also the figures in that table definitely don’t seem right anyway - look at the net asset value for Advanced for example. Progresso is dropping off for sure, but don’t they have loads of employees/offices? How can their net asset value be lower than Scholarpack?! I’d take that table with a pinch of salt..

 

I also think Bromcom should watch what they say in response to this. From what I’ve seen so far I don’t think there are some really glaring breaches of the procurement process on UL’s side if I’m honest. UL have run many tenders before and will no doubt have hired highly paid consultants for this, even if Bromcom is right and it was biased in some way I think they are going to have a hard time proving it in court as UL will have covered their bases. It is going to be a long drawn out case, during which time competitors can use this story as ammunition against Bromcom at every stage. I’ve already seen staff from some of their largest customers sharing the article, and as we all know teachers talk.

 

Bromcom recently released a thing that allows mixed MIS trusts/LAs to dashboard data at a high level. In the future if these two are competing in a tender at a LA/MAT that use that tool couldn’t Arbor challenge the procurement for the same reasons of existing supplier relationships? It’s like the Cold War just got hot and the gloves are off now.

 

Also Bromcom PR saying:

“Commercial disputes in vast majority of cases stay private unless leaked to press by parties who see advancing their causes or market interests. One should question who would be in this case and whether holding a kangaroo court in social media and building prejudices are serving justice and supporting the sector or such parties.”

That seems pretty accusatory of Arbor/UL, potentially even libellous actually. Interesting comment to make when you are about to enter serious legal proceedings, would be surprised if that actual quote wasn’t mentioned in court in some way. The errors in grammar In that statement suggest to me that it probably wasn’t run by legal counsel before it was posted here, bit risky in my opinion and could come back to bite them.

 

Whatever happens I have my popcorn at the ready, will be a defining moment in the market for years to come.

[FN-GM]

@Bromcom-PR - top and bottom if this is you’re taking a public school to court. This will negatively the education of the children that attend schools in this MAT. You “may” have a legal case. But myself and others (speaking off this forum) believe you don’t have a moral one.

 

Shame on you.

[synaesthesia]

Did I understand it correctly that they accuse ULT of having prior prejudice because they already have said competitor's product in some of their schools? If so, yes they should be ashamed of themselves. If they're happy with the product in those instances but want to go out to tender for a trust-wide setup they're legally obliged to do so as per the procurement legislation. They will have bias for (or indeed against if they didn't like it!) that competitor as a result of their experience, so if Bromcom didn't bring anything new/improved to the table why would they consider it over and above what they know?

It feels childish from Bromcom.

[Lonix]

I'm still struggling to understand why this court case is being pushed....... maybe I'm being blind or just don't understand...

 

As a Governor, it is our job to make sure we get good value on our MIS and at some point when things calm down I will look to tendering and potentially going cloud based. I think we not long signed up to a 3 year contract on SIMs so at the moment we are stuck.

 

BUT its also important that there are non financial matters here and not just whats cost effective...... going for the cheapest deal isn't always best for the school... and I make this clear

- Support: How quick is the company on dealing with issues? how often they occur?

- Relationship: How comfortable do we as a school feel with the company? do we feel that the company has our best intentions at hand and do they care about us?

- Training: Do we want to spend the time training a whole school?

- Personal opinion/preference: Like it or not, I'm the one that deals with the SIMs issues.. patches and updates and yes I do have a personal opinion on the software. So If I screamed about SIMs in a good or bad way.. that opinion still matters in the eye of the Governors/SLT....

 

Its very important to note that "cost effective" isn't always the best solution. If the school manipulated the numbers - how did Bromcom find out? If Bromcom believes the numbers got the changed - again, why do they suspect this? what evidence have they got?...

 

Now for a company taking legal action at a school for not choosing them.... would I be afraid of adding them to our tender list?.........

[Primus]

It's because of the size of the contract and the law requiring a full tender process.

 

The allegation is that the tender process was not correctly followed.

 

I am surprised so many members on here have taken a view that Bromcom shouldn't bring a legal action. If Bromcom feel the law has been broken and they have suffered to their detriment then they are entitled to bring forward a case.

 

Schools are not exempt from following the law and taking a blanket view that you shouldn't sue a school or MAT even if they have done wrong is flawed.

 

The court will decide if there has been wrongdoing - it is unlikely a firm the size of Bromcom would bring a baseless case - remember they themselves will have already paid a fortune for legal advice. If they bring a baseless case then they will pay financially and reputationally but to suggest they shouldn't use the law of the land for fear of reputational damage is very unfair.

 

Perhaps it might be best for members to hold off on commenting about reputational damage until the outcome is known and to not enter into procurement processes themselves with a closed mind relating to one of the major players in the fairly small market.

[vikpaw]

You're right, however, it feels a little like sore loser syndrome.

I worry about this and the effect on the market, because I'm trying to foresee the potential outcomes.

* They are ruled correct, win some damages, tender process happens again; would they win that tender? If they did what kind of working relationship would there be?

* A court rules they get the contract by default due to whatever (i know, unlikely); again, what kind of working relationship would there be?

 

I get all the positives about making sure people do things properly, follow the law, follow due process. There must be another way to encourage this....

Ultimately, if someone doesn't want to work with you, do you go begging and screaming at them and what, force them to sign a contract?

 

I'm trying to think of a suitable analogy, apologies if this falls flat, maybe someone else who gets what I mean can articulate it better:

 

Billy asks Johnny to come and play, and Johnny says 'No, get lost'. Whether Johnny had valid reason, or was simply being cruel, lazy etc. is irrelevant. Billy complaining to the teachers, and forcing Johnny to explain his reasons to the principal won't really fix the problem. If Johnny is forced to play, it ain't gonna be fun.

Will Johnny say yes next time?

Will other kids play with Billy because they're scared of being told off or will they find a better reason to avoid break time.

Maybe we'll teach all the kids to be kinder towards each other, or more mindful of others' feelings.

If I was Billy, I'd be looking for other people to play with who want to have fun.

 

EDIT: Maybe the end goal is just to get recompense for lost time/resource/money in bidding and move on... it just doesn't feel like it and that of course is highly subjective.

Edited October 12, 2020 by vikpaw