UK printing firm De La Rue, which last month lost a public contract to a French-Dutch company to produce British passports, announced last night (April 2) that it would challenge the government’s decision in court.
The news comes after the government extended the deadline for appealing the decision from today (April 3) until April 17 – which now gives the firm time to challenge the Home Office.
When Labour MP Liz Twist, whose Blaydon constituency is home to a De La Rue factory, presented an urgent question on the issue last month, the government defended its decision to award the £490m contract to Gemalto, citing savings to the taxpayer of £120m over the 11-year contract.
But De La Rue has shot back, arguing that their French-Dutch rival, which is more than a quarter owned by the French government, unfairly undercut its competitors. De La Rue highlighted too that its product was of the highest quality and more secure.
In a statement released last night, De La Rue confirmed that it was “taking the first steps towards initiating appeal proceedings against the provisional decision to award the British passport contract to a part state-owned, Franco-Dutch company.
‘Best quality, most secure bid’
“Based on our knowledge of the market, it’s our view that ours was the highest quality and technically most secure bid,” the firm said. “We can accept that we weren’t the cheapest, even if our tender represented a significant discount on the current price.”
“It has also been suggested that the winning bid was well below our cost price, which causes us to question how sustainable it is. In the light of this, we are confident that we remain the best and securest option in the national interest.”
Critics of Gemalto’s bid have argued that because the firm is part-owned by the French government, it can afford to underbid because its government will keep the company afloat despite its unsustainable bids.
It has been reported that the UK government weighted quality 60 per cent and price 40 per cent when making its decision on which firm to award the contract to – and De La Rue has argued that they produce a far more superior product.
Gemalto profit warnings
Just last July, Gemalto issued its fourth in a series of profit warnings, which has stoked fears of another Carillion-style disaster, where a struggling firm takes on government contracts through aggressive and unsustainable underbidding. Aerospace giant Thales has offered to buy up the troubled Gemalto and is now in the process of completing a merger.
Unite has spearheaded a campaign against Gemalto being awarded the contract – the union has helped set up a petition that has now garnered more than 20,000 signatures. Unite also last week (March 28) rallied MPs at an event outside Parliament, where ministers took ‘passport photos’ in Unite’s photo booth to show their support for the campaign.
It is understood that about 200 jobs at De La Rue will be put directly at risk by the government’s decision. But Unite fears many more jobs could face the axe if the firm doesn’t find work for its plants that now produce British passports.
Gemalto has said the firm will create about 70 jobs in the UK but Unite believes this will not be enough to mitigate the effects to local communities in the North East which will be hit by De La Rue losing the contract. What’s more, the sites Gemalto runs in the UK aren’t expected to take on any of the new passport work.
“Unite strongly supports De La Rue’s legal challenge on the grounds of jobs and protecting communities,” said Unite national officer Louisa Bull.
“There is also the issue of national security,” she added. “Our current passports are technically secure to a high standard and need to remain so, when concerns about national security continue to be a priority.
“De La Rue makes a quality product and has held the contract for producing UK passports since 2009 without a hitch.
“We are also concerned about media reports that Gemalto won the contract by simply undercutting its rivals, which, if true, smacks of unfair competition – the government should investigate these claims urgently.”
You can help with Unite’s joint campaign with the GMB and Daily Mirror by signing our petition calling on the Home Office to keep production of British passports in Britain.