After the Home Office ‘standstill’ and exhausting the legal avenues, British passport maker De La Rue ditched its appeal against the controversial decision by policymakers to award a Franco-Dutch company to make the new post-Brexit blue passports.
Gemalto, a partly state-owned, French-Dutch consortium – currently producer of UK photo driving licences - offered the cheapest bid, beating De La Rue, a private British firm, by ‘£120 million’ in a blind first-price sealed-bid auction (FPSB) for a ‘5-year contract’. On revelations of the winning bid, De La Rue sought legal advice to repeal the Government’s decision on grounds of quality assurance that Gemalto cannot fulfil.
Tendering for procurement is demanded under EU competition rules. Large public contracts must be tendered to companies across the Union. The blind nature of government procurement procedure left ministers and their Eurosceptic constituents backing De La Rue for the bid on grounds of national interest, punctuality in deliverance and quality assurances as concerning revelations came to light.
Were the tables turned, and France issuing tender for new passports, the scene would be quite different. De La Rue would not have seen any snuff of a potential contract to bid upon.
Imprimerie Nationale currently make the French passports, another state-run, French printing organisation, that the French government selected without putting the job out to tender.
On the one hand, the British taxpayer is receiving a better deal in terms of paying less for their passports, largely due to the subsidisation from the French government and her taxpayers to deliver such a low, below-cost price bid.
The potential for Gemalto to be able to produce the high quality demanded of British passports at such a discount is doubtful – a point of view expressed by De La Rue’s declaration that the continental bid was below cost price. Similarly, the hiring of Slaughter and May to challenge the Home Office's decision and request an enquiry in to how their rival can feasibly deliver on a £120 million discount to their tender - while guaranteeing quality and security are upheld.
This figure is questionable primarily because it is stated by the Home Office to cover 11-and-a-half-years, when the contract is only for 5 years - misleading the general public in their formal statements.
The conclusions point to a low quality, questionable security and a French government that will refuse to let Gemalto go underwater should she not be able to fulfil her contracts.
Further accusations toward the French suggest they may be using offshoring of British passports as a political postulating tool they can later claim against the Brexit referendum decision – ‘Hey! Look at les rosbifs now - they cannot even make their own passports without us.’ It may prove to be a curious concession of £120 million considering the tens of billions in Brexit settlement fees initially signed-off by Theresa May to sever direct political affiliation with the mainland.
If the French and Dutch governments want to subsidise our new passports at the expense of their own taxpayers, I don’t see a significant issue.
Accordingly, this does depend on how tactfully our government handles such claims. These shall be critical to the eventual profitability of the decision in both the UK’s reputation overseas and cost effectiveness and security in times of international tension.
Should Theresa May dispel them by pointing out France’s glaring dalliances with flawed nationalisation policies and socialist-inclining tax rates, which led to brain-drains to London and other world cities to skirt the high income and corporation taxes there, then it may well prove to be the right call.
De La Rue believes it was beaten solely on price, and not quality or security. The British firm has never failed to deliver contracts to a high standard and in a timely fashion. It makes 8 million passports a year under the current contract and prints more than 15 million across a range of countries annually.
The same cannot be said for Gemalto. Petitions and the offshoring raised revelations of 750,000 flawed Estonian ID cards that were vulnerable to cloning and identity theft.
Toomas Hendrik Ilves, the Estonian president from 2006-16, warned the British government to approach this new deal with caution after the ‘irresponsible’ behaviour of Gemalto in failing to notify his country about the ID card fiasco.
They later found out from a Czech research group that a German firm supplied the chips and software that is linked to millions of ‘at-risk’ cards across Europe.
A further exposé came to light from the Gemalto consortium’s bungled contracts with the Peruvian governments’ passports. Not long after introduction in 2016 were the ‘high-tech’ documents brought into question over typos and peeling covers.
While security was acceptable, a series of failings were linked to the incumbent president of Peru, Ollanta Humala, to hasten deliverance of passports for political gain. These claims were made public in leaked government documents and led to Panorama (Peru) covering the story. The defective passports subsequently cost Peruvians £22 million in custodial processing and deportations since as innocent travellers were mistaken for committing forgery and attempting illegal immigration. Not to mention the recalls and reprints that Gemalto had to make good upon.
Were this simply a question of who holds the best hand post-Brexit, I would automatically accept the backed Gemalto bid to deliver our passports.
However, further investigation and discussion with Peru and Estonia may prove prudent in this time of heightened international tensions, where security should be the paramount focus for new passport issuance. But when the dust settles, and if the Conservative leadership are later forced to dismiss French claims about British industrial and competitiveness woes, I’d fancy our chances.
Richard Bolton is editor-in-chief of The Manchester Magazine and a final-year Politics, Philosophy and Economics student at The University of Manchester