THE BLOG

Will No One Rid Me of This Turbulent Company?

Now that the London Olympics are receding into memory and the world has moved on to other pressing sports issues, like substitute NFL referees, the time is right to look back and ask one very important question; namely, just how badly did G4S screw up?

You remember G4S, don't you? That is the British private security company that was unable to provide enough guards for the Summer Games and failed to disclose its problems in the buildup to the event. Its performance was so bad that the British got mad at Mitt Romney back in July when he, in one of his rare absolutely honest statements, indirectly mentioned its obvious lack of readiness.

As it turns out, the most charitable thing one can say is that G4 did badly, very badly. Others, such as British Members of Parliament would be much harsher. As evidence, consider the newly released report put out by the British Parliament's Home Affairs Committee. In the conclusion the report states:

Reports commissioned by LOCOG [London Organising Committee of the Olympic and Paralympic Games] in the months preceding the Games indicated clearly that there were problems with G4S's recruitment, training and communications. They also found that the management information presented to LOCOG by G4S were fundamentally unreliable. G4S, meanwhile, continued to insist that it was in a position to deliver its contract. Although Mr Buckles [G4 CEO] claims to have acted on all the relevant recommendations, the final outcome suggests that the changes to the data G4S were reporting to LOCOG were more presentational than substantial. The data were at best unreliable, if not downright misleading, and the most senior personnel in the company must take full responsibility for this.

To paraphrase what King Henry the Young said of Thomas Becket, Archbishop of Canterbury in the 12th century, will no one rid me of this turbulent company?

This, by the way, was not some unfortunate confluence of events that nobody could anticipate; a perfect storm, as it were. There were many warning signs. For example:

It seems that the penny finally dropped with G4S management on 3 July, when Mr Taylor-Smith [Chief Operating Officer of G4] telephoned Mr Buckles to inform him there would be a shortfall of staff. Mr Buckles was on holiday at the time, which suggests that this was something more than a routine call. But Mr Buckles did not mention the scale of the problem to the Home Secretary when he spoke to her on 6 July, the same day on which Mr Horseman-Sewell was boasting recklessly in the press that G4S would have been more than capable of simultaneously delivering multiple Olympic security projects around the world. Neither did Mr Buckles disclose the scale of the problem when he met the Home Secretary on 10 July. It is clear that by this stage the Home Office had realised that something might be seriously amiss, as Charles Farr [Director-General of the Office for Security and Counter-Terrorism at the Home Office and Chair of the Olympic Security Board] had already begun to put contingency plans into place. But it is astonishing that G4S took a further week to tell its partners how bad things were.

G4S's debacle was far more than a black eye just for G4S. It set back the entire security industry in the United Kingdom. Considering how many years the private sector has been talking up how it is supposedly more efficient and cost effective than the public sector this is irony at its highest level. Referring to the contingency plan that brought in British troops to help make up the shortfall in security staff the committee report said:

The contingency plan was by common consent a huge success. We commend the contribution that the armed forces made to the Games. Their ultimate success in delivering a safe and secure Games suggest that, in the planning of future major events, the military might more appropriately be considered as a first choice for venue security, rather than a back-up, with appropriate recognition and reward for the personnel concerned. We also commend the police on the additional contribution which they made to support Games security and make good the failings of G4S.

The MPs are not the only ones to think this. One comment on a chat board for security professionals said:

G4S had the chance to do a good job and give many professinal security operators an early xmas gift but they choosed to think profit in stread of service

so as far as i can see they deserve anything they get and if new contracts come to other security companys then thats a good thing all the best to them

Furthermore, not only did G4S not deliver the staff it promised, it also screwed over many of those it had promised to hire to work during the Olympics.

G4S's poor communications with its staff and prospective staff was no doubt a contributory factor to the overall failure of the company's Olympic contract. It has also had an impact on those prospective employees who went through the selection, training and screening process in good faith, only to be left without work at the end of it because of G4S's poor management. In our view , it is clear that G4S is under a moral obligation to immediately make generous ex gratia payments by way of apology to those applicants who were left out of pocket because they were not offered work despite successfully completing the training and accreditation process.

Perhaps the most important lesson, in the words of Ronald Reagan is that before signing a contract, is to trust but verify. It seems that the British authorities treated G4S in the same way the American taxpayers used to think of investment firms like Bank of America or Goldman Sachs, i.e., they were too big to fail.

Few would have expected a company the size of G4S to fail in delivering such as high-profile contract. But it did fail. By contrast, LOCOG was able to recruit and deploy 70,000 volunteers, nearly seven times the number of people that G4S was asked to provide, working to the same timescale and under similar constraints. In letting major contracts, a company's past performance is clearly an important factor, but government departments, police forces and other public bodies must not place too much weight on a company's size and reputation alone. We also wish to see evidence that the company's recruitment, training, personnel management and cash recovery systems have been reviewed in the light of the experience of so many of those recruited for employment during the Olympics who were severely let down by G4S.

[...]

The Government should not be in the business of rewarding failure with taxpayers' money. As private sector providers play an increasingly important role in the delivery of police and criminal justice services, it is vital that those commissioning services look at the track-records of prospective providers. We recommend that the Government establish a register of high-risk providers, who have a track-record of failure in the delivery of public services. This would provide a single source of information for those conducting procurement exercises about companies which are failing or have failed in the delivery of public contracts.

Subscribe to the World Post email.