More than £10 billion worth of contracts for the supply of items like PPE were awarded without a competition process, a government audit into procurement during the coronavirus pandemic has found. It also revealed that firms with links to government were awarded lucrative deals.
A report by the National Audit Office has concluded that “standards of transparency and documentation were not consistently met,” while the government handed out £18 billion worth of contracts by the end of July.
The report notes that a “high priority lane” was established for potential suppliers which had been recommended by ministers, MPs, and senior NHS staff.
One company, Pestfix, was mistakenly added to the “high priority lane” before it received £350 million worth of contracts. These included a delivery of 600,000 masks which did not meet the government’s own PPE specifications at the time.
A £253 million deal with Ayanda Capital was brokered by an advisor to the government’s board of trade, with £155 million spent on 50 million masks which cannot be used for their intended purpose.
Why did this happen?
Due to the pandemic, the government has had to purchase a lot of goods and services relatively quickly, to meet demands for PPE, medical equipment and more.
Generally, government procurement should go through a competition process, as well as having diligence tests applied to suppliers, to check for financial irregularities and any other potential issues, including conflicts of interests.
The purpose of these procedures is to encourage good value for money, and minimise the risk of taxpayer money being used improperly.
While the NAO’s report acknowledges that the situation required the government to act with “extreme urgency” it still raises concerns about the impact of a lack of transparency and competition on billions of pounds worth of contracts.
What else did the report find?
The NAO report noted that there had been “inadequate documentation” relating to potential conflicts of interest and a lack of record-keeping within the “high priority lane.”
One in 10 firms in the high priority lane were awarded contracts, compared with one in 100 through the usual process.
Of 493 referral leads, only 250 sources were recorded, with a majority coming from the private offices of ministers and a significant number directly from backbench MPs.
The report also found that a firm which is owned by people who have “previously advised or worked with” cabinet minister Michael Gove were awarded a contract, as well as a firm which a minister previously owned £90,000 worth of shares in.