Mitie: We were wrong to request fee of £ 10,000
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However, it has now emerged that Mitie charged other suppliers ￡250 each to join “shortlists” on two national contracts this year.
Suppliers were told that Mitie had “invested heavily” in a procurement system and the cost would be recovered “through a multitude of scenarios”, including charging suppliers to bid for work.
“The ￡250 is a small fee, recovering a small percentage of our cost and helps support the continued running and development of that process. It is only payable by those that are shortlisted and have a real opportunity to increase their offering and revenue within Mitie Group,” the email said.
“The services on offer are to become one of a small select group of [service name] that will be used across Mitie and its client base.
“Once we have established who these suppliers are, we will be encouraging our teams and our clients to migrate over, thus opening up further opportunities.”
One supplier who received the request said: “I know it went out to a lot of companies and there would have been an awful lot of people who did pay.”
In an open letter to John Telling, Mitie’s corporate affairs director, the supplier added: “We are an SME [small and medium sized enterprise]. We fight hard for every penny we earn. We provide an exceptional service, and having paid this sum, against my intuition, we were told we would not be a supplier as we were 'not large enough’.”
Mr Telling said the company had identified two instances where suppliers had been charged fees to join shortlists but the practice had ceased in April. “It is not going to happen anywhere else,” he said.
He added the decision to charge ￡10,000 was “isolated” to suppliers of a company that Mitie acquired last year. “Mitie has not uncovered any other examples across our business,” he said.
Mr Telling said that Mitie’s executives were going to talk to the suppliers affected. “If we have had money from them that’s unjustifiable we will be refunding it.” Asked when it was justifiable to charge a ￡10,000 fee, Mr Telling said: “It’s not justifiable to ask for it.”
He added the fees were unrelated to Mitie’s talks with the Government over contract efficiency savings.
Ruby McGregor-Smith, Mitie’s chief executive, was appalled when she first heard that Mitie had charged fees, citing Mitie’s roots as a small business and its “values”.
In further revelations regarding suppliers, The Sunday Telegraph disclosed that the Cabinet Office is examining allegations that Compass Group has used an extensive rebate system that had not been disclosed to the Government.
In two instances, former suppliers had also been able to pass on the cost of the double-digit rebate to the Compass units supplying services to customers.
Compass said it was “a legacy issue” and was not part of “how we do business today”. Compass UK managing director Ian Sarson said the rebate system “was widely known”.
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