Opportunities for SMEs and apprentices among social benefits of Bombardier's winning Crossrail bid

Out-Law News | 07 Feb 2014 | 10:26 am | 2 min. read

Bombardier has pledged to maximise opportunities for smaller companies in the supply chain as part of its winning bid for the £1 billion Crossrail rolling stock and depot contract, the Government has announced.

The Canadian firm, which intends to manufacture and assemble 65 new trains for the new London line at its plant in Derby, is targeting at least 25% of the value of the contract to go to small and medium sized enterprises (SMEs) as part of its bid. The project will support over 1,000 UK jobs and around 100 apprenticeships among other social benefits, according to contracting authorities Transport for London (TfL) and the Department for Transport (DfT).

"This tender process underlines what some would say is now the market norm in UK procurement: to factor in social benefits, such as maximising opportunities for SMEs," said procurement and competition law expert Jennifer Robinson of Pinsent Masons, the law firm behind Out-Law.com.

"The new EU procurement directives, approved by the European Parliament last month, will only strengthen the hand of authorities to put in place public contracts with longer-lasting benefits for the local and indeed national economy," she said.

The Crossrail contract covers the supply, delivery and maintenance of 65 new trains and a depot at Old Oak Common, and will be finalised after a 10-day standstill period. The contract will support 760 UK manufacturing jobs plus 80 apprenticeships at Bombardier's plant in Derby, according to the DfT; plus a further 244 jobs and 16 apprenticeships for the construction of the depot. When fully operational, the depot will support 80 jobs to maintain the trains.

The new line, which will run between Maidenhead and Heathrow in the west and Shenfield and Abbey Wood in the east via new tunnels under central London, is due to open in December 2018 and will increase London's rail-based capacity by 10%. The trains, which are 200 metres long and able to carry up to 1,500 passengers, are due to operate on the existing UK rail network from May 2017 before being put into service on Crossrail.

As part of the tender process for the contract, bidders were asked to set out how they would engage with their wider supply chains and maximise opportunities for SMEs. They were also required to commit to a London-based office to manage the delivery of the project, and to plans to deliver job and training opportunities including apprenticeships.

"Crossrail will transform rail services in London and the south-east," said Andrew Wolstenholme, chief executive of Crossrail Lrd. "Procurement of the rolling stock and depot is just one more step in delivering this new railway and making it a reality for millions of passengers."

He added that the company had conducted the process in a "fair, objective and transparent manner and in full compliance with the regulatory framework".

Last month, the European Parliament voted to approve three new EU Directives on procurement as well as a new regulation on the access of third country goods or services to the EU's internal public procurement market. The measures set out in the package will give contracting authorities more freedom to consider social aspects amongst other criteria for determining which bid is the most economically advantageous to accept, with price no longer allowed to be the central determining factor.