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

Abstract

PurposeThis 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/approachThe 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.FindingsThe 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/implicationsThe study is based on a single case. Further case research is warranted to test the external validity of the results.Practical implicationsBy debriefing unsuccessful bidders and listening to their viewpoint, public buyers can help to assuage the anger that accompanies contract loss.Social implicationsElected 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/valueThe paper demonstrates that the Kubler-Ross model of grieving has utility for understanding reactions to loss in a public procurement context.