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Ferguson ferries deal whistleblower says evidence 'ignored'

BBC George McGregorBBC
CMAL whistleblower George McGregor believes procurement rules were broken

A whistleblower who worked on a controversial ferries contract says his evidence to an inquiry was ignored.

George McGregor was procurement manager at ferries agency CMAL when a £97m deal was awarded to Ferguson shipyard. The two ferries are now £260m over budget and six years late.

He told a lawyer's inquiry that senior staff broke procurement rules and the yard should not have been shortlisted.

KC Barry Smith said he investigated within the remit given to him by CMAL.

He insisted his inquiry was independent and thorough, based on documents made available to him, but that he would be prepared to consider any new relevant information.

CMAL said all "relevant information" in its possession was provided to the inquiry and it was "not aware" of Mr McGregor's concerns.

The KC was commissioned by CMAL following claims in a BBC documentary that the 2015 procurement for Glen Sannox and Glen Rosa may have been rigged in favour of Ferguson Marine Engineering Ltd (FMEL) which ran the shipyard at the time.

The firm was led by businessman Jim McColl, an economic adviser to both first ministers Alex Salmond and Nicola Sturgeon, who had rescued it from administration a year earlier, just days before the independence referendum.

PA Media Salmond with Ferguson workersPA Media
First Minister Alex Salmond, pictured at the shipyard, helped persuade his economic adviser Jim McColl to rescue the Ferguson shipyard in 2014

The KC's report, published last month, cleared CMAL of "fraud", an allegation that was not made in the BBC's coverage.

BBC Disclosure understands that not all of the documents leaked to The Great Ferries Scandal investigation have been provided to Mr Smith.

Mr McGregor's job as procurement manager at CMAL meant he was responsible for ensuring all bidders were treated equally.

He claims that:

  • FMEL should have been excluded at the pre-qualifying stage for failing to meet what he believes was a "mandatory requirement" by providing a letter from a bank showing they could provide refund guarantees, an important financial safeguard.
  • He says CMAL's claim that this letter was not mandatory is "poppycock."
  • Warned senior CMAL staff they were too close to FMEL executives during the bidding process
  • He had to tell CMAL's two bid assessors not to score the bids while sitting together, which is against procurement rules
  • The procurement "broke every rule in the book"

Mr McGregor said: "I told the KC that procurement rules had clearly been broken, and I'm disappointed that was not reflected in his report."

The BBC has seen Mr McGregor's statement to the KC inquiry, and it includes his claims about the process. There is no mention of them in Mr Smith's final report.

The 69-year-old former serviceman said he was surprised to be told by the KC that his inquiry into the BBC's claims excluded investigating whether procurement rules had been broken.

He said: "I asked him, 'well, what are you here for then?'"

He has since written to CMAL's lawyers to complain that none of his evidence was reflected or even acknowledged in the published report. He said he contacted the BBC because he was dissatisfied with their response.

"It was clear to me FMEL were given favourable treatment that was different to what the other bidders got," he told the BBC.

Mr McGregor joined CMAL as procurement manager at the start of 2015.

His predecessor in the job who oversaw the initial pre-qualification questionnaire (PQQ) phase of the tender had left and Mr McGregor oversaw the remainder of the process.

Mr McGregor said he raised concerns about the PQQ phase after reviewing the paperwork, and later complained to senior staff about this and other potential breaches of procurement rules.

He resigned from CMAL in 2019. The procurement of the two ferries was one of the concerns he listed in subsequent communications with CMAL.

Getty Images Glen RosaGetty Images
The ferries Glen Sannox and Glen Rosa, pictured, are still being built by Ferguson Marine

The build of the ferries went badly wrong, with CMAL and FMEL blaming each other for the problems. The yard went into administration again in 2019 and was nationalised.

The two ships, which were meant to cost £97m, will now cost at least £360m and are still not completed.

Asked to respond to Mr McGregor's claims, Mr Smith said: "I set out in my report the terms of reference I was given; and the methodology I followed in carrying out a thorough and independent investigation.

"I have clearly explained the basis of my findings and conclusions, including under reference to the documents I was provided with, or ingathered during the investigation.

"My investigation was instructed by CMAL pursuant to their duties under the SPFM [Scottish Public Finance Manual] to investigate allegations of fraud.

"If the BBC believe there is new information that I have not seen, then please share all relevant information with me and I will carefully consider it."

A spokesperson for CMAL said: "We are not aware of any concerns raised by George McGregor to any member of the CMAL team in relation to the procurement process of 801 and 802 [Glen Sannox and Glen Rosa]

"We can confirm that all relevant information in our possession was provided to Barry Smith KC during his investigation.

"Further, we are not aware of the content of any of the statements given to Barry Smith KC during the investigation. We therefore cannot comment on whether George McGregor raised concerns with him around any element of the procurement of 801 & 802."

Reporting team: Mark Daly, Calum Watson, Kevin Anderson