UK audit office report finds multiple failings in PPE procurement

By on 19/11/2020
The UK government set up a “high priority lane” favouring companies referred by senior officials, ministers, parliamentarians and public servants in its PPE procurements, according to a new report from the NAO. Credit: CDC/Pexels

The UK government set up a “high priority lane” favouring companies referred by senior officials, ministers, parliamentarians and public servants in its PPE procurements, according to a new report from the National Audit Office (NAO).

The report examined 8,600 contracts covering £18bn of pandemic-related procurement spending – two thirds of it on PPE. Some £10.5bn was spent “directly without any competition” by the end of July, according to findings. Just £200m was “awarded using a competitive tender process or using a competitive bidding process from a framework agreement”, it adds, while all but £700m went through fresh contracts – many of them to new suppliers.

The spending followed a decision by the Cabinet Office in March to suspend normal procurement rules, and to issue guidance setting out the options for emergency procurement – including awarding contracts without competition.

At the time, the report says, to secure PPE supplies “the government was often having to procure goods quickly in a highly competitive international market, which meant that it did not consider it practical to undertake competitive tender exercises.”

Media outlets and campaigners found examples of apparent waste and questionable behaviour in the award of contracts. The Byline Times, for example, exposed the awarding of huge contracts to Tory donors, firms with close links to ministers, and other businesses with no clear assets or experience in PPE supplies.

Campaigning organisation the Good Law project launched a series of legal actions, and the subsequent NAO report has raised concerns over transparency, due diligence, documentation and contract awards.

Weak processes

The procurement team established a “process to assess and process offers of support to supply PPE”, the NAO noted, “but not all processes were in place during early procurements”. For example, contracts worth £1.5bn were awarded to 71 suppliers “before the financial and company due diligence process was standardised”.

This cross-government emergency PPE buying team, consisting of about 450 staff, also set up a “high-priority lane” that handled “potential PPE leads from government officials, ministers’ offices, MPs and members of the House of Lords, senior NHS staff and other health professionals”. This was because such leads were considered to be “more credible”. Nearly one in 10 of these fast-lane businesses won contracts compared with fewer than one in 100 of other suppliers.

Pestfix, a pest control company that supplied £59m worth of unusable masks, was placed in the high-priority lane by mistake, the NAO finds. Another fast-lane company, Ayanda, which supplied £155m of unusable masks, has links to an adviser to the trade secretary Liz Truss. The report says that the adviser, Andrew Mills, “acted as Ayanda’s representative” and signed the contract for the company.

Paper trail

“For procurements where there is no competition,” the report says, “it is important that awarding bodies document very clearly why they have chosen a particular supplier and how any associated risks from a lack of competition have been identified and mitigated. This is to ensure public trust in the fairness of the procurement process.”

But NAO investigators found “inadequate documentation” showing how departments had considered and managed the risks associated with no-competition procurement, including examples where departments had not “fully” noted why emergency procurement was used and why suppliers were chosen.

“Many of the contracts awarded over this period have not been published in a timely manner,” the report continues. Guidance notes that basic information about all contracts awarded should be published within 90 days; but by the end of July, 55% of the contracts worth more than £25,000 had not been published by November, and only 25% were published within the three-month target. 

“Without competition in the procurement process, it becomes even more important that public bodies document their procurement decisions and actions fully, publish their contract awards in a timely manner and manage conflicts of interest effectively,” the NAO said. “These actions help to maintain public trust in these processes and to prevent procurement decisions being the subject of challenge.”

About Kate Hodge

Kate is a journalist and editor, holding roles at both the Guardian and the Financial Times. She specialised in education and combines writing, commissioning and editing with social media and audience engagement. If you have any ideas you would like to pitch, or suggestions to improve the website, feel free to email her on [email protected]

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