Lost tender – SEK 80 m in income at risk

YrkesAkademin (“YA”) has lost the tenders for the Swedish national employment agency, Arbetsförmedlingen, in all places where YA today conducts professional truck driver education. From the decision on April 22 there is a ten day appeal period. YA will investigate the tender process and offers in order to make an informed decision on whether to appeal the decision or take any other action.

Semi Trucks Waiting to Board Ferry

Should the winning company refrain from signing a contract locally, the second most ”economically beneficial” offer will become the winning bid. In 24 out of 27 locations, YA has that position.

However, if the tender decision would get full impact on production, it would mean a significant reduction of expected income. In 2015, the income from truck driver education was approximately SEK 80 m.

In parallel, a similar tender has been conducted on bus driver education. The decision from Arbetsförmedlingen is expected within a few weeks. The total income from bus driver education amounted in 2015 to about SEK 45 m.

In a comment, YA’s CEO Jan Larsson said, “Naturally, this is a set-back for YA. But it also reflects the nature of tender based business. Our offered price reductions would have demanded a substantial efficiency gain to meet the new cost driving quality requirements from the authority. Despite those aggressive plans, we had on average almost 15 percent higher prices than the winning company.”

 In parallel to ensuring a proper handling of the formalities around the tender and an efficient production adjustment, we will increase focus on initiatives to drive profitable growth in new areas. The lost tender confirms the strategic importance of a continuous growth agenda and increased diversity in customers, timing and areas of education.