Item No.
City of Westminster
Decision-maker
Date
CABINET MEMBERS
14
FOR
February
Transport &
2003
Infrastructure and
Street Environment
CLASSIFICATION:
FOR GENERAL RELEASE
Title of Report
Re-letting Strategy for the Highways and
Transportation Contracts
Report of
Director of Planning & Transportation
Director of Environment & Leisure
Wards Involved
Policy Context
All
Civic Renewal Aims :
 City Investment
 Customer First
Financial Summary
There are no financial implications arising directly from this
report
1.
Summary
1.1
The recommendations of the recent Best Value Review for Transportation
Programme Delivery included a Re-let Strategy for the various contracts that
are used to deliver Transportation Services in Westminster. Appendix 1 lists
the current contractual arrangements.
1.2
The findings and recommendations of the Best Value Review have been
considered and endorsed by the Overview and Scrutiny Committees for
Transport & Infrastructure and City Management. The Contracts Review
Board has also approved the Re-let Strategy, which was part of those
recommendations.
1.3
The purpose of this report is to set out the programme for the Re-let process
and to highlight for Cabinet the timing of key decisions. It discusses any risk
associated with these decisions and how they will impact on service delivery.
2. RECOMMENDATIONS
2.1
It is recommended that the Cabinet Members:
2.1.1 Note and approve the re-let strategy and process;
2.1.2 Consider and agree a streamlined structure for managing the decision making
process as suggested in Section 10.
1
2.2
The decisions identified in paragraph 2.1 aim to ensure that the timetable set
for the re-let strategy can be adhered to and that a robust structured
approach is agreed and adopted for the negotiation of the contracts. The first
critical step is to issue the OJEC notice for the contract(s), preferably by mid
February if the targets in the programme are to be met.
3.
Background to the Re-let Strategy
3.1
The recommendation of the Best Value Review Project Board, following
discussion with DCB and CRB, is that the re-let of the Transportation
Consultancy and Work Contracts should:






comprise up to four packages, possibly covering – Highways
Maintenance, Street Lighting, Bridges and Structures, Highways and
Traffic Projects. However, the tendering process would allow tenderers to
bid for combinations of, or all, packages;
use contract(s) structured as “operator” contract(s) – merging the
consultant and contractor roles;
incorporate Partnering Agreements and be based on the New Engineering
Contract (NEC);
be for a minimum of 5 or 10 years with the facility to roll on (subject to
satisfactory performance and continuous improvement) to fifteen or more
years;
consider a negotiated tender route; and
incorporate co-location of key elements of the client, consultant and
contractor staff.
3.2
Subsequently, the re-let team (see Appendix 2) has developed this strategy
into a plan for implementation. This has raised a number of issues that
Members need to be aware of and there are a number of key decision points
within the process where Members’ views will be needed. This report to
Cabinet members is included in the Council’s Forward Plan of Key Decisions
for January to April 2003 and is the first key decision point in the re-let
process.
3.3
Appendix 3 sets out the programme for re-let and identifies the key decision
points. These are addressed in turn in this report and the risks associated
with each discussed.
3.4
Members will note from this report that the re-let strategy is for the award of
the contract(s) to take place by the end of April 2004. The successful
Contractors would then be expected to commence mobilisation over a lead-in
period and to commence work at the beginning of October 2004. Members
should note that all of the existing contracts are due to expire prior to October
2004 and accordingly, will need to be extended in order for the re-let strategy
to be implemented and officers are in the process of seeking to arrange such
extensions. The extensions are discussed in more detail in Section 9 below.
3.5
The options considered and the reasons for adopting the recommended
approach have been dealt with in previous reports on the Best Value Review.
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4.
The Negotiated Procedure
Legal Advice
4.1
In the report to CRB of 15th October 2002, officers had outlined the following
issues as possible grounds for using the Negotiated Procedure:

Under the existing contractual structure, the City Council has found it
difficult to integrate financial and management information with the
existing contracts and the co-ordination of works programmes is a
significant problem. A key requirement for the future contracts is,
therefore, integration of suppliers’ systems with those of the City Council;

As explained earlier in this report, four contract packages are to be offered
and the tendering process should allow tenderers to bid for combinations
of, or all, packages. Whilst it is clear that this will have significant
implications for the way in which the work will be delivered, it is impossible
to specify these implications at the pre-tender stage;

The City Council is seeking to work in partnership to provide management
and procurement expertise to deliver the services. Whilst it may be
possible to specify what work needs to be done under the contract, the
way in which this may be done could vary considerably;

Two separate departments will undertake management of the contract(s).
Fundamental to the success of this will be the arrangements that are put
in place for co-location. This is again impossible to specify at the pretender stage and will be a key consideration for the tender evaluation
process;

Following the Restricted Procedure in this particular exercise would very
likely reduce the scope for innovation. This in turn is likely to limit the
opportunities for cost reductions over the life of the contract(s).
Other advantages of taking the negotiated route are that it will provide
opportunities to

re-engineer the service interface with the CSi

better understand the balance between cost and quality in the tenders
4.2
Officers sought the advice of Sharpe Pritchard on whether the award of the
contract(s) could be negotiated rather than procured through the Open or
Restricted Procedures in these circumstances and on the risks associated
with this approach.
4.3
Sharpe Pritchard has advised that, under Regulation 10(2)(c) of the EU
Regulations (Works), exceptionally where the nature of the works are such as
not to permit overall pricing, it may be permissible to use the Negotiated
Procedure. They have also advised that the process needs to be robustly
managed, even-handed and transparent.
4.4
Having taken account of Sharpe Pritchard’s advice (and following further
consideration of the re-let strategy and the drafting of the service prospectus)
officers are confident that there are sufficient grounds to justify the use of the
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Negotiated Procedure. This is based on the inability of the City Council to
predetermine arrangements for the management of the contracts, partnering,
packaging (whether 1, 2, 3 or 4 lots) and co-located working, as well as
difficulty in specifying how the services are to be co-ordinated and paid for.
Officers consider the circumstances to be exceptional and that they do not
permit prior overall pricing. Discussions with Sharpe Pritchard are continuing
to ensure that, through the adoption of a robust negotiation process, the risk
of challenge is minimised. However, Sharpe Pritchard have confirmed that the
risk is low.
Other issues
4.5
Apart from the risk that use of the negotiated procedure could be challenged,
there is a further possible risk that in certain circumstances the negotiated
route can lack focus. In this case it is proposed to minimise this risk by strict
management of the process. As explained in the following sections of this
report, a four-stage process is proposed that concentrates, initially, on
reducing the number of potential bidders through a series of quality sieves.
This process of reduction is subject to EU regulation and the selection of the
ultimate bidders from the parties who originally express an interest will of
course be conducted in accordance with those regulations. The third stage
will include a decision on the number of packages to be tendered, prior to the
final negotiation stage.
4.6
This tightly controlled process will mean that the specification for the services
will evolve through the negotiations, with changes only being made at defined
points and being carefully documented. The final specification for the future
services will emerge before the submission of Best and Final Offers (BAFO)
from tenderers.
4.7
A summary of the pros and cons around the negotiated and restricted routes
is shown in Appendix 4.
5.
5.1
Select Long List (by Spring 2003)
Companies that respond to the OJEC Notice will be sent a Prospectus that
describes the Council’s approach to the re-let. They will be asked to complete
a Pre Qualification Questionnaire. This will include the usual range of
questions relating to:
 Financial strength and capacity
 Quality procedures and processes
 Environmental policies and procedures
 Health and Safety policies and procedures
 Equal opportunity policies and procedures
 Technical competence and strength
 Information Technology competence and strength
These questions will be used as “hurdles” to identify companies that meet the
Council’s minimum requirements for the packages applied for.
5.2
A further filter will be applied at this stage through a question on the
companies’ general approach to partnering and the management of the
services. The responses to this question will be used to limit the number of
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companies included on the long list to a maximum of 5 per package.
Interested parties will also be asked to give their views on the pros and cons
of amalgamating some or all of the four service packages. This will be used to
help inform the Council’s ultimate decision on this issue and will not form any
part of the evaluation procedure.
5.3
There are no significant risks associated with this decision. However, there
are possible implications for maintaining existing services if any of the main
contractors or consultants is not amongst those chosen for the long list. This
is a problem that will impact on each decision stage.
6.
6.1
Select Short List (by Early Summer 2003)
Stage 2 of the evaluation process will reduce the long list to the short list of
companies that will be invited to negotiate for the four packages. Evaluation
of the competing bids would again at this stage be based on quality and may
include an element of pricing by asking for “cost-plus” information. This could
request information on the level of overhead that would be applied to basic
labour, plant and material costs. A breakdown of these overhead costs would
allow identification of Corporate Overheads, IT expenditure, staff training
investment, property costs, etc. This could also provide an early opportunity
to gauge the financial case for the number of packages.
6.2
The quality submissions required will focus on the companies’ managerial
culture and competence and will be structured around seven elements of the
Business Excellence Model:







Leadership
People Management
Partnership and Resources
Processes
Customer Satisfaction
Staff Satisfaction
Impact on Society
6.3
The first four of these are identified as enablers and are the “things a
company does” to achieve success. The last three are results and relate to
how the company measures its success. For the enablers, companies will be
asked to describe their approach to leadership, people management, etc. and
then to describe how they would apply (or deploy) this approach to the
delivery of the City Council’s services.
6.4
For the results, companies will be asked to explain how they measure their
own performance and to indicate how well that performance compares with
other companies or national averages.
6.5
The scores for the seven criteria will be weighted to arrive at an overall quality
score. On the basis of these scores, possibly in conjunction with weighted
price score, the long lists will be reduced to a maximum of 3 per package.
6.6
Again the only significant risk is that associated with the exclusion at this
stage of existing contractors or consultants.
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7.
Agree Preferred Bidders and Packaging (by Late Summer 2003)
7.1
The third stage evaluation will reduce the short lists to preferred bidders (a
maximum of two per package). However, it will also be the stage at which
the City Council will finalise the packaging of the services – whether
four, three, two or one.
7.2
For this stage, the evaluation will focus on price and the companies’ ideas for
developing partnering and innovation. These factors will be key to the
assessment of the packaging options and will be used to develop the
specification(s) for the final packaging of the services.
7.3
In advance of this decision the Council will need to have clarified its approach
to pricing and payment. A key philosophy of the re-let strategy is that the
Council should use the NEC form of contract and enter into a Partnering
Agreement with the Contractor(s). A key objective of Partnering is the
commitment of all partners to Continuous Improvement. This approach is also
enshrined in Rethinking Construction that argues that driving down costs and
achieving value for money is not achieved through low tender prices.
7.4
The Construction Task Force, which produced the Rethinking Construction
Report, was set up to advise on, from the client’s perspective:

the opportunity to improve the efficiency and quality of delivery of UK
construction;

to reinforce the impetus for change; and

make the industry more responsive to customer needs.
It concluded that the Construction Industry needed to modernise to tackle the
severe problems facing it:
 Low, unreliable rate of profitability.

Poor rate of investment in R&D and capital.

A crisis in training.

Too many clients equating price with cost and selecting designers and
constructors almost exclusively on tendered price.
This latter point was widely seen as one of the greatest barriers to
improvement, with the public sector as the biggest culprit.
7.5
Pricing Strategy - What is clear from our industry consultation and
comparison visits is that there are a wide variety of pricing approaches being
adopted under Partnering Agreements and the Rethinking Construction
Initiative. In developing a Pricing Strategy, a balance needs to be struck
between ensuring that the contractor(s) receive a fair reward for their efforts
and are continually achieving improvements against cost and quality targets.
Thereby ensuring that the Council realises whole life, value for money.
7.6
Traditional pricing methods have used schedules of rates; percentage fees
and lump sums, all of which transfer a degree of risk to the contractor. It is a
moot point, given the nature of the work covered by these contracts, whether
the council should seek to transfer risk to its suppliers. It may be that
attempting to transfer risk will just lead to that risk being priced into bids
(particularly by suppliers who do not currently work with the City Council). It
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may be that adopting a cost plus approach, allied to the use of target costs
and performance indicators, may be an appropriate way forward. As well as
being in tune with the principles of Partnering it could simplify the pricing and
the evaluation process. The negotiated process will provide the opportunity
for the Council to explore these alternatives.
7.7
The approach suggested will allow a cost comparison to be made between
the different packaging options. What will be less simple will be to compare
existing costs with possible future cost. In any event, the market conditions
have changed significantly since these contracts were last let. With a
significant increase in transportation related expenditure, staff resources are a
significant problem. This is likely to be reflected in the prices the council will
receive.
7.8
There may be a perceived risk of delaying a decision on packaging to this
stage of the evaluation process, but it provides a clear opportunity to assess
the price implications of different packaging before committing to one
particular strategy.
8.
Select Contractors (by Spring 2004)
8.1
A final round of negotiation will be used to develop the partnering approach
and, through a series of workshops, assess the cultural compatibility of the
preferred bidders with the client. It will also be used to develop the final
specification against which Best and Final Offers will be made. Evaluation of
these BAFOs will be against a mix of price and an assessment of cultural
compatibility gained from the workshop sessions.
9.
Extension of the Current Contracts
9.1
A consequence of the relet strategy is that it will be necessary to extend some
of the existing contracts for periods of between 6 and 18 months so that a
single termination date is created (30 Sept 2004). The reasons for this are:

The consultancy and works contracts need to be co-terminus in order to
permit the proposed packaging.
 To allow time for any protracted negotiations as part of the relet process.
All current contracts except 4 are extendable under the terms and conditions
of the existing contracts. Where no provisions exist, officers will negotiate the
necessary extensions, in line with the legal requirements.
9.2
On 19th November, CRB approved the strategy to extend the various
contracts as required, and in doing so carefully considered the current
performance of each contractor. It was agreed that with the exception of the
Highways Maintenance Management Contract (Babtie ) and the E6
Maintenance of Street Lighting contracts (D Websters), performance on all
contracts had been acceptable and in accordance with the requirement of
individual specifications.
Since submission of a report to CRB in July 2002 on the problems around the
Babtie contract, considerable progress has been made in delivering an action
7
plan of improvements and building sound relationships for the remainder of
the contract. Progress has been most marked around financial management.
There are still however significant weaknesses to be resolved and progress
will be monitored by CRB quarterly.
An earlier report to CRB outlined the detailed problems with the Webster
contract together with an improvement plan. It was noted that the contractor
had responded positively and delivered improvements around for example
planned scouting, repair response times and the introduction of better
qualified staff to work on the contract. Effort to resolve longer-term issues will
continue and progress will be monitored quarterly through CRB.
9.3
The risks to the Council of continuing with the 2 weaker contractors as
opposed to retendering for the short term or alternatively bringing the services
back in house have been considered as follows:

To retender any or all of the contracts for such a short period would risk
attracting a significant premium and value for money would be
jeopardised. The existing contracts are considered to offer competitive
prices.

To continue with the weaker contracts will mean that the Council could
face further difficulties during the 18 months. However to put this in
perspective it should be noted that these contractors are not weak in all
areas, and risk is being managed by focus on the action plans.

To bring the weaker services (or all service back in house) would require a
major input of resources at a time when these are needed for the relet of
the new contract packages. To take on a further major contracting activity
would jeopardise the award of the new contracts and impact on day to day
delivery of services. Notwithstanding that an element of the workforce
would transfer under TUPE, there would be considerable uncertainty as to
the labour force on day 1 of the new arrangements.

The Council would not be able to undertake the works contract without
access to Depots and capital equipment.
On balance based on the acceptable performance of most contractors and
consultants, and the action plans in place to improve and monitor progress on
the two weaker contracts, it is considered that extension of the contracts as
agreed by CRB represents a low risk to the Council. However the views of
Cabinet Members are sought.
10.
Decision Making and Reporting
10.1
Given the cross-departmental and cross cabinet portfolio nature of these
contracts, it is essential that streamlined decision making and reporting
systems are put in place. A cross-departmental Project Board (Appendix 1)
has been established that includes both Directors. Your views on putting in
place a similar arrangement at Cabinet member level are requested. In
addition, in parallel with this report a similar report was considered by the two
8
Overview and Scrutiny Committees (Transport & Infrastructure Feb 5 th and
City Management Feb 10th). The Committees agreed to set up a joint working
group to provide a scrutiny role for the re-let programme.
10.2
Appendix 3 also indicates the decision-making responsibilities and the
briefing/reporting points during the re-let programme. The early qualitative
sieving process would be carried out by the Project Team and approved by
the Project Board. The final decision on packaging, preferred bidders and the
future contractors would be taken jointly by the Cabinet Members for
Transport & Infrastructure, Street Environment and Finance following
observations from the Overview and Scrutiny Working Group.
10.3
Cabinet Members and the joint Overview and Scrutiny Working Group would
be briefed on progress, not only of long listing and short listing, but also of the
development of the pricing strategy and employer’s requirements
(specifications).
11.
Financial Implications
11.1
There are no immediate financial implications arising from the re-let strategy
however the new contracts will raise a number of financial issues, in particular




IT and systems development
Legal and other support service re-let costs
Contract costs could increase due to rising market rates. There could
however be efficiencies from reducing the number of suppliers and in the
longer term through continuous improvement.
Client reorganisation will be required but the costs of the new organisation will
be determined by the final decision on the number of contracts to be
awarded.
12.
Legal Implications
12.1
The legal implications of the re-let centre on the use of the negotiated
procedure, as discussed in section 5 above.
13.
Staffing Implications
13.1 There are no staffing implications arising from the review in the short term,
however the role and structure of the new clienting arrangement following the
re-letting of the contracts will need to be reviewed and put in place before the
start date of April 2004. Staff consultation will be carried out in accordance
with agreed procedures nearer that time and as part of the planned change
management process.
14.
Performance Plan Implications
14.1
The re-let strategy supports the delivery of City Investment and Customer
First programmes under Civic Renewal.
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15.
Consultation
15.1 There has been no formal consultation on this report although the re-let
strategy was the subject of extensive consultation during the Best Value
Review. A similar version of this report is on the agendas for the City
Management and the Transport and Infrastructure Overview and Scrutiny
Panels on 30 January 2003 and 5th February 2003 respectively.
16.
Crime and Disorder Act
16.1
There are no direct implications for Crime and Disorder arising from this
report.
17.
Co-operation with Health Authorities
17.1
The re-let strategy has no implications for Sections 26 and 27 of the Health
Act 1999.
18.
Human Rights Act 1998
18.1
There are no implications for the re-let strategy in connection with the Human
Rights Act 1998.
19.
Conclusion
19.1
As part of the recent Best Value Review, a re-let strategy for the Council’s
Transportation Contracts has been developed. Options for the way in which
these contracts should be structured and the form of contract to be used was
the subject of a robust option testing and risk assessment process and has
previously been reported on. The recommendation relating to the use of the
negotiated procedure has been arrived at following discussion with the
Council’s Legal Advisers and the Contract Review Board. The alternative is to
adopt the Restricted Procedure. This is not recommended because it would
restrict the opportunity for the Council to give detailed consideration to the
pros and cons of a range of contract packages, innovative management
approaches and alternative payment methods to ensure that the contract(s)
build in mechanisms for continuous improvement.
IF YOU HAVE ANY QUERIES ABOUT THIS REPORT OR WISH TO
INSPECT ANY OF THE BACKGROUND PAPERS, PLEASE CONTACT
Derek Barnden on 020 7641 2694, email dbarnden@westminster.gov.uk Fax
020 7641 2658
Or Martin Low on 020 7641 1975, email mlow@westminster.gov.uk Fax 020
7641 2658
BACKGROUND PAPERS
The documents used or referred to in compiling the report were: -
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
Report on Re-let Strategy for Transportation Services Contracts to Contracts
Review Board. (15th October 2002)

T&I O&S Committee and City Management O&S Committee Reports – Best
Value Review of Transportation Programme Delivery: Report on Outcomes of
Review and the Continuous Improvement Plan (16 th October 2002 and 26th
November 2002)

Report to Contracts Review Board 19th November 2002 – Reletting for
Transportation Programmes – Supplementary Report on Contract Extensions
and Performance Issues
………………………………………………………………………………
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For completion by Cabinet Member
Declaration of Interest

I have no interest to declare in respect of this report
Signed ……………………………. Date ………………………………
NAME:

I have to declare an interest
State nature of interest ……..……………………………………………
………………………………………………………………………………..
Signed ……………………………. Date …………………………………
NAME:
(N.B: If you have an interest you should seek advice as to whether it is appropriate
to make a decision in relation to this matter.)
For the reasons set out above, I agree the recommendation(s) in the report entitled
Re-letting Strategy for the Highways and Transportation Contracts and reject
any alternative options which are referred to but not recommended.
Signed ………………………………………………
Cabinet Member for ……………………………….
Date …………………………………………………
If you have any additional comment which you would want actioned in connection
with your decision you should discuss this with the report author and then set out
your comment below before the report and this pro-forma is returned to the
Secretariat for processing.
Additional comment: …………………………………………………………………
………………………………………………………………………………………….
………………………………………………………………………………………….
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NOTE: If you do not wish to approve the recommendations, or wish to make an
alternative decision, it is important that you consult the report author, the Director of
Legal and Administrative Services, the Chief Financial Officer and, if there are
staffing implications, the Head of Personnel (or their representatives) so that (1) you
can be made aware of any further relevant considerations that you should take into
account before making the decision and (2) your reasons for the decision can be
properly identified and recorded, as required by law.
Note to Cabinet Member: Your decision will now be published and copied to
the Members of the relevant Overview & Scrutiny Committee. If the decision
falls within the criteria for call-in, it will not be implemented until five working
days have elapsed from publication to allow the Overview and Scrutiny
Committee to decide whether it wishes to call the matter in.
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Appendix 1
The City Council’s current service is delivered through a number of consultants and
contractors:
 The Highways Maintenance Management Service is provided by Babtie
Consultants who presently manage the Highways Maintenance E term
contracts (all those except E5);

Hyder consultants inspect and manage the maintenance of bridges and
structures through contractors FM Conway Ltd;

Parkman and ten other consultants are retained as members of a
Consultancy Panel for the design and supervision of the implementation of
traffic and highways schemes through contractors Murphy and Carillion.
Contract Name
Highways Maintenance Contracts
Highways Maintenance and Management
Services
E1 Carriageway and Footway works
E2 Footways works (masons)
E3 Drainage Investigation
E4 Anti Skid Surfaces
E6 Street Lighting Maintenance and
Improvements
E7 Minor Highways Work
E8 Maintenance of Street Furniture
E15 Painted and Thermoplastic
Roadmarkings
Bridge Management
S1 Inspection and maintenance management
of bridges
E5 Maintenance of Highways Bridges and
Structures
Project Development and Implementation
Term consultant and panel consultants
P1 Highways & Environmental Improvements
Contractor/Consultant
Babtie Group
Ringway Ltd
J Murphy
Ringway Ltd
Colas Ltd
David Webster
J Murphy
LP Painters Ltd
Jointline
Hyder Consulting Ltd
FM Conway Ltd
Parkman
10 panel consultants
J Murphy
Carillion Construction Ltd
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Appendix 2 – Transportation Services Contract Re-let
Project Board and Project Team Membership
Project Board
Carl Powell
Joe Duckworth
Derek Barnden
Martin Low
Kevin Goad
Andrew Nisbet
Project Team
Derek Barnden
Martin Low
Kevin Goad
Andrew Nisbet
David Yeoell
Dave Axon
John Roberts
Nigel Parry
Lisa Lawrenson
Director of Planning and Transportation
Director of Environment and Leisure
Director of Technical Services
Head of Traffic and Transportation
Business Support Manager
Consultant
Director of Technical Services
Head of Traffic and Transportation
Business Support Manager
Consultant
Head of Engineering and Implementation
Interim Head of Scheme Development
Head of Highways
Street Lighting Manager
Performance Review Manager
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SWOT ANALYSIS of Negotiated v Restricted Routes
Strengths







NEGOTIATED
Weaknesses
Open book approach minimising risk
of disputes and claims.
Encourages co-operation + innovation
and continuous improvement.
Can tailor working practices and
management to best advantage of
client and contractor.
Can mix + match bidders best ideas.
Can incentivise both quality and cost
improvements.
Achieve a better understanding of the
balance between cost and quality
across tenders
Can re-engineer the service interface
with the CSi
Opportunities
Strengths





Possibility of marginally higher initial
cost but with longer term cost benefits.

Output – based payment needs
effective budget management.
Legal challenge ( this will be controlled
by the strict management of the
process whereby changes to the
specification can only be made at
defined points.

Threats
RESTRICTED
Weaknesses
Straightforward pricing against fixed
specification.
Proven long established methodology.
Certainty of outcome.
Relatively less volatile budget/spend
profile.






Opportunities
Appendix 4
Difficult to change management or
client arrangements even if there are
clear benefits.
Pricing based on fixed risk
apportionment, which will probably
result in higher costs.
Cost savings + innovation likely to
benefit contractor not client.
Difficult to tailor client arrangements
to final packaging of works.
Risk of abortive work + delays if
transfer to Negotiated or later stage.
Pricing errors leading to claims and
legal costs.
Threats
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