Pressures Mounts On UK Procurement Processes

The UK Government has come under renewed pressure after being ordered to reveal the names of companies that were directly awarded significant contracts for the supply of PPE in a recent ruling from the Information Commissioner’s Office (ICO).

The Good Law Project (GLP), was the first to reveal what they term ‘VIP’ access, and they are challenging the DHSC over contracts awarded to three companies in particular: PestFix, who were directly awarded contracts worth hundreds of millions for gowns and masks, Ayanda Capital a financier who won a £250m contract to provide protective equipment through a non-competitive tender, and  Clandeboye Agencies, a Co Antrim sweet manufacturer directly awarded a multi-million pound PPE contract.

In 2020 there were 106,160 single bid PPE tenders. So far this year, there have been 97,232.

In our recent article Zombie Tenders, we outline how single bid tenders are linked to higher prices, shorter bid response times, high-value contracts, and complex tenders.

A recent Guardian article reported that The Department of Health and Social Care (DHSC) has previously refused to disclose the names of 47 companies that had contracts awarded through a fast-track process. These contract awards were allegedly allocated to firms with political connections and therefore without due competitive process. The department claim the contracts were lawfully awarded.

Their justification references early 2020, where the UK government triggered procurement policy note 01/20 allowing the government to directly award contracts due to extreme urgency (regulation 32(2)(c). The policy note includes the ability to:

● direct award due to absence of competition or protection of exclusive rights;

● call off from an existing framework agreement or dynamic purchasing system;

● call for competition using a standard procedure with accelerated timescales;

● extend or modify a contract during its term.

However, a report by the National Audit Office (NAO) found that companies referred to by Ministers, MPs, or senior NHS officials were given high priority by the DHSC procurement process, resulting in 10 times greater success for securing contracts than companies whose bids were processed via normal channel.

This investigation comes after the Financial Times last year uncovered the £19bn of UK Covid-related contracts awarded without seeking rival bids.

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Photo by Bence Szemerey