Grieving the loss of a public contract: De La Rue and the Brexit passport

Abstract

Purpose This paper aims to examine how firms react to the loss of a major government contract. Reactions to contract loss are yet to be properly studied in public procurement. Design/methodology/approach The hypothesis is that contract loss triggers a five-stage grieving process, as predicted by the Kubler-Ross model. The hypothesis is tested using the recent UK passport contract in which the British supplier, De La Rue, lost to the Franco-Dutch supplier, Gemalto. Secondary data from corporate publications, news reporting, parliamentary debates and trade union press releases is used to compile the case. Findings The findings show that De La Rue and its supporters passed through the five stages of grief in response to their loss. De La Rue initially exhibited denial by vowing to appeal the decision. Next came anger directed at the UK Government. An attempt to bargain was made during the standstill period. Depression set in after De La Rue admitted it would not appeal. Finally, acceptance was indicated by De La Rue pursuing new opportunities in the product authentication market. Research limitations/implications The study is based on a single case. Further case research is warranted to test the external validity of the results. Practical implications By debriefing unsuccessful bidders and listening to their viewpoint, public buyers can help to assuage the anger that accompanies contract loss. Social implications Elected representatives, the media and civic society groups have vested interests in the outcome of contract competitions. Moreover, they use their agency in pursuit of their own interests, whether through political bargaining, lobbying or editorials. Originality/value The paper demonstrates that the Kubler-Ross model of grieving has utility for understanding reactions to loss in a public procurement context.