Birmingham's oldest company, badge maker Firmin, has won a prestige naval contract following a swift U-turn by the Ministry of Defence after claims of ‘sharp practice.’

The firm has received a ‘sincere and unreserved apology’ from top MoD officials after Firmin went public on losing out on a four-year tailoring contract for altering and repairing personnel uniforms at the Clyde Naval base.

Firmin, who supplied badges to Lord Nelson’s crew at the Battle of Trafalgar, the crew of the Titanic and rival factions in the American Civil War, went public after the MoD awarded the contract worth tens of thousands of pounds to Stirling, a Scottish rival.

The Newtown Row firm, which dates back to 1655, had scored comfortably higher in the tender process than the Scottish group, but lost out after being undercut on the price.

But the MoD announced an about-turn – preventing an erroneous use of taxpayers’ money over four years – after Firmin chief executive Tim Newnes had called the Ministry’s procurement practices ‘dysfunctional and potentially illegal.’

“The MoD published contract award criteria through the regulated procurement process and scored Firmin with 94 per cent but the contract has been awarded to a competitor who scored 86 per cent. MoD are misleading the private sector to generate competition it needs to drive down prices.

“This amounts to ‘sharp practice’ and is not consistent with the behaviour one expects from a Government department,” he added.

Firmin bosses fired off a letter to the MoD calling for the decision to be reversed – and warned they would mount a legal challenge via a judicial review if necessary.

But within 48 hours of the story going public, Clyde-based assistant head of commercial Gavin Fitzsimmons had announced a change of heart by the MoD.

Mr Fitzsimmons wrote to Mr Newnes: “I have now taken the opportunity to personally review the circumstances leading to the MoD’s proposed contract award decision.

“In short, I have concluded that we in MoD Commercial at HMNB Clyde have indeed made an error in the proper application of the published contract award criteria and incorrectly sought to award the contract to a lower scoring tenderer.

“Helpfully, the mandated contract standstill period provides us with an opportunity to correct this mistake.

“I am therefore entirely content that the correct application of the published contract award criteria must result in the immediate withdrawal of all previous contract award decision letters.

“I have put measures in place which will see the timely re-issue of new contract award decision letters and which will provide confirmation of MoD’s intent to proceed to contract with Kashket and Partners (Firmin’s parent group).

“I trust that these proposed actions do serve to adequately address the underlying challenge thay you had sought to progress and that the proposed outcome is acceptable to you?

“It remains for me to extend a sincere and unreserved apology for the MoD Commercial failure to apply requisite process to this instance – for which I am personally accountable. I do hope we can quickly move on from this and collectively focus on providing first-rate services to the military community at HMNB Clyde.”

Firmin group accountant Roy Donnelly said: “Your article helped prompt a review by the MoD and they have admitted their error. We thank you for your interest and involvement.”